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This Month's Lesson: The Effects of Market Appreciation and Inflation on Collector Car Insurance: Grundy Protects Customers with "Peace of Mind" Coverage

It is well-known that Grundy's Agreed Value insurance does not make deductions for age of a vehicle or expected "wear and tear" when evaluating a loss. (If anything, we understand that there is a greater likelihood that your collector vehicle's value will increase over time, as the car and its parts become rarer.) In case of a total loss, a Grundy policyholder is guaranteed the Agreed Value that is established at the inception of their policy.

As the values of collector vehicles rise, we invite our customers to contact our office to increase the Agreed Value coverage limits on their policies; however, we understand that sometimes customers may not think to increase their vehicle's coverage, and sometimes the value of a vehicle may appreciate more rapidly than expected.

With an ever-changing market, the cost to repair or replace your collector car can change at any time. To protect customers and to offer coverage for the current market value of their vehicles, Grundy's insurance policies include extra "peace of mind" protection that account for market appreciation and inflation.

The Inflation Guard on Standard Collector Car Policies

Grundy collector car policies have a built in Inflation Guard, which in recent years has automatically increased the insured value of your vehicle(s) by 4%. This increase is shown on your policy at each renewal and is reflected in a small premium increase for the added coverage. (N.Y., Mass. and S.C. policies do not currently include the Inflation Guard.)

Although the Inflation Guard works adequately to cover the increased cost of repair and market appreciation on most cars, extremely rare and valuable cars are often appreciating much faster than other collectors in the market place. For this reason, many of Grundy's large collectors are provided a "Collections Policy" which provides "peace of mind" and up to 150% of the value at which their car is insured.

The Collections Policy Alternative

When a new policy is written, owners should understand the values of their cars and always insure them for their "current market value." If unsure of the value of a vehicle, research can be done on recent sales of similar vehicles, and Grundy's underwriters can be consulted on valuation. Once the value is determined and the Agreed Value in established, the policy is issued accordingly. Thereafter, in cases of very rare cars, a single auction sale can dramatically reestablish the value of a vehicle. This is particularly common in vehicles with extremely limited production and performance or cars with race history.

Owners are not expected to continually "watch" the market to reevaluate their cars after every similar sale; to protect our customers, the Grundy Collections Policy offers up to 150% of the Agreed Value in the event of a total loss.

For example, at inception of a policy, an owner and Grundy agreed that their rare Ferrari should be insured for $1 million. Tragically, the car was destroyed in a fire just two months after the policy was issued. At this point, if research revealed that a similar Ferrari in similar condition had sold for $1.2 million, the owner could receive a settlement for the newly established value. (Note that we do not recommend underinsuring your vehicles, and the Collections Policy's 150% Valuation Clause does not apply if a vehicle is knowingly underinsured at the policy's inception.)

The 150% Valuation Clause can apply at any time during a current or future policy renewal, meaning it can be two months (as in our example) or two years later. And, there is no additional premium for this benefit!

Personal Lines

MVP Program

  • • Agreed Value
  • • Unlimited Mileage

Special Client
Services

  • Large Collections
    Insurance Beyond
    your Vehicles

Marine

  • • Agreed Value
  • • No Surveys
    Required for
    Classic Boats

Massachusetts
and South
Carolina
Collector Car
Insurance

Commercial Lines

Restoration
Shops & Car
Builders

Public &
Private
Utilities

Other
Businesses

  • Dealerships,
    Museums and More

Dear Grundy, I cannot put into words the feeling of relief after talking to you. I was so pleased to know that a company existed that could give me such peace of mind so quickly. Thank you for your assistance and understanding. Very truly yours,

—Anne J. Colbert from Tomball, Texas