Graham's building and property was covered by his business insurance, but the customer cars in the shop were not. Many hot rodders neglect to insure their project cars while they are in-progress or assume that the cars are covered by a shop's insurance. Just as with homeowner's insurance, the insurance held by the shop working on your car may not include coverage on your vehicle. If anything could be considered lucky for Graham, it's that the rodding community is made up of decent people and many of his customers have been very understanding, despite their own personal losses.
A similar accident happened at Bobby Alloway's shop in Louisville, Tennessee, in 1998. Lightning caused a fire that wiped out his shop and destroyed 14 project cars. "I used to tell my customers 'If you don't have insurance on your car and something happens, I'm going to call you up and we'll just have to cry together.' When I actually had to do that, it was the hardest thing to do. Most of those customers were friends and they understood.
"Some of the customers didn't have insurance. Some had their cars insured for agreed value with American National. As soon as the insurance company found out about the fire, those car owners had a full check within days with no issues whatsoever. We've built back or replaced most of those cars. Now I have as much insurance as I can possibly buy, but you can't possibly buy enough. We could cover something, but not nearly what the cars are worth." In Part 2 of this story, we'll look a little closer at insurance for shops.
Preparing for the Worst
We asked Graham for some advice to rodders with cars being built in a shop. He emphasized that the builder/owner relationship is built on trust and often on friendship, but that each person also has responsibility for his property. Before a project begins, customers should talk to the builder to make sure each understands the expectations of the other. The builder should keep detailed records of all the work done on the cars. Plans change in the middle of many projects and trying to remember what was done or not done to a shop full of cars is very difficult after an event like a fire. Make sure everything is documented and have a contract written and signed.
Jakubowski at J.C. Taylor suggest that if you are looking for a shop, either for a project build or for repairs, ask other rodders for recommendations. When visiting an unfamiliar shop, don't be reluctant to ask about its insurance or to ask to see an up-to-date certificate of liability insurance. It might be an awkward thing to do in a hobby based on friendship, trust, and handshakes, but when the hobby is also a business, it's important to get things in writing. It's especially important in the event of having to file a claim with an insurance company-and Jakubowski has received a few calls from car owners who had cars in shops that went out of business.
That brings up the importance of dropping by the shop and checking on your car on a regular basis. It's hard to imagine a hot rod owner not doing this, but Jakubowski remembers one customer who had a car under construction and hadn't visited the shop in more than a year. When he finally did, the place was locked up, dark, and empty. Everything-including his car-was gone. This kind of thing only happens rarely, but if it happens to you, once is enough.
Doriguzzi at Heacock Classic reminds us that a car might move from shop to shop during the course of a buildup. Even if the primary shop has adequate insurance, a subcontracted shop (such as the paint shop or the upholstery shop) may not. This is another reason why it's smart to be covered during the build. In addition to keeping your insurance company up to date on the value of the vehicle, keep them informed about where your car is being built, and where it will be going. Keep an inventory of the parts and pieces you own that are at a pro shop or your own shop-not just the car itself, but the engine on a stand, the front end over in a corner, the various parts in boxes, you name it.