Agreed Value Insurance – Don’t Underinsure

Classic Car Insurance -Agreeing on the Right Value

As classic car enthusiasts, we’re always working on our cars. In the process, we may add significant value. Are you reviewing your classic car insurance policy to keep up with your changes? Condon Skelly is the official insurance company for, so I asked them for some detail information on “agreed value” insurance.

With what I learned, you should be careful to keep your agreed value policy up to date. Read on…

classic car insurance, agreed value insurance

classic car insurance quote One of the benefits of Condon Skelly’s Collector Vehicle policy is the agreed value feature. Agreed value can be established from an appraisal or through photos and discussions with Condon Skelly’s car-guy staff… Either way, it’s a must to insure your collector car at a value that protects your investment. Don’t make the mistake underinsuring in hopes of saving a few dollars on the policy… that can have terrible consequences! Consider the following before you “Agree” to the wrong value:

Don’t Underinsure Your Classic Car

It can be tempting to insure your collector car for less than it’s worth – after all, a smaller agreed value means a smaller annual premium. However, we can all agree, saving a few dollars a year would never be worth losing your car if it’s wrecked or stolen.

Here’s an example… your car could sell for as much as $20,000 in today’s market, but since you only have $10,000 in it, you choose to insure for $10,000 agreed value. Then, if your $20,000 value car, for whatever reason, is damaged to the tune of $10,000, your agreed value, you will not be able to make the insurance claim without forfeiting the car.

Let me say that again: You will not be able to make the insurance claim without forfeiting the car.

In other words, your car would be a “total loss” and become the property of the insurance company. Why? According to your insurance policy, your car’s only worth $10,000. If you’re claiming your ride suffered $10,000 in damages, then it’s a “total loss”. At that point, you can of course, recover the full amount of your insurance policy, but in doing so ownership of the car is transferred from you to your insurance company.

Before you freak out, it actually makes sense. Think about it:

If you were to actually total your car, meaning it had suffered damage equal to its total actual and agreed value, you wouldn’t think twice about taking the insurance money and forfeiting the car because it has no remaining monetary value. The same rule applies to underinsured vehicles, but it’s much harder to choose between the car and the cash.

Or worse yet, imagine your ride was stolen. Your car’s gone and you’re left with half the money it’d take to replace it.

On the other hand, if you insure your car for the correct market value, $20,000 in this case, then as you would expect, the damages are accessed and even with $10k in repair costs, you’d keep the car and get a check to cover the repair. Bottom line: Your car is fixed and you still own the car!

When you underinsure and have a total loss, you may have a to make a hard decision: either pay for the damages out of pocket to avoid claiming a total loss, OR claim a total loss, get the $10,000 and lose ownership of your car. In most cases, you will have the option of buying your car back, but the price will be based on an appraisal of the salvage value.

agreed value insurance

So remember, always insure your car for the correct, current market value.

Underinsuring may save a few dollars, but it’s not worth the risk. Also, like I said first: Don’t forget to increase the agreed value, as needed even more than once per year, when you make changes to your ride. New wheels, paint, updated interior, etc. can make a big difference in value.

Increasing the value on your policy is as simple as sending an email or making a phone call to your insurance company. You’ll be glad you did!

Condon Skelly is the official classic car insurance company of

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