Ed Fotheringham
Cover Your Assets
October 1, 2005
In the mid-1990s Holly Bromberg bought himself a Porsche 911 Cabriolet as a
treat for weekend driving. But when he put the car on his regular-use insurance
policy he received something of a shock. “It added $3,200 to my premium,” he
says. “I was 32 and I had a perfect driving record. I got other quotes, but they
were just as expensive.” Bromberg—who had a background in product
liability—decided this was nonsensical and launched Leland-West, an insurer with
a twist. As well as insuring the classic cars such companies typically cover,
Bromberg would offer coverage for those like himself who wanted a weekend toy.
“We [also] created a plan for people who buy new sports cars,” he says.
“Everyone laughed at us but we said, let’s give people options.” Today, this
coverage is more common in the industry, and it is the type of innovation that
makes Leland-West—and competitors such as American Collectors, Condon &
Skelly, Grundy Worldwide, Hagerty, J.C. Taylor, and Parish Heacock—so appealing
to automotive enthusiasts. Essentially, if that classic Ferrari Lusso or
limited-use Morgan Aero 8 in your garage is not yet insured with a specialty
firm, it should be.
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(Click image to enlarge.)
The most appealing aspect of such insurance is that it not only offers
coverage superior to that offered by regular-use insurers, but it comes
at a
fraction of the price of adding a car to the policy you have for
your everyday
Range Rover. This might sound like infomercial hype, but
it isn’t. Even though
the value of a classic car can easily exceed that
of a new luxury
car—replacement costs are often stratospheric—there are
reasons that a premium
does not have to cost the earth.
For starters, classics and exotics see far less road time than that Range
Rover. While regular-use policies generally allow for between 12,000 and 15,000
miles a year, how many miles will you really put on a new Murciélago or a V-16
Cadillac? Wander through the showroom of a Lamborghini or Bentley dealership and
you will see plenty of two-year-old cars with only 2,000 miles on the clock.
Second, the owners of such cars are a fastidious lot, and they typically drive
their cars with extreme care. Often, the owners have been directly involved in a
restoration project. They might have spent years looking for the right car
before investing time, money, and emotion in an exacting restoration. The cars
preening on the lawns of concours d’elegance are in better shape than when they
left the factory, and the mere thought of a fender bender, let alone a
spectacular crash, has the potential to induce heart failure in collectors.
Furthermore, these cars are typically housed in locked—and often
climate-controlled—garages. “It’s more like insuring a work of art,” says McKeel
Hagerty, whose eponymous company insures both collector classics and new
exotics. “It’s protecting someone’s passion. They really love their cars.”
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