Pat Goss: There’s a lot more to that collectible or antique car sitting in your garage than buying it and maintaining it. You have to insure it and do it properly. And to explain some of the dos and don’ts, we have McKeel Hagerty of Hagerty Insurance with us. Hi.

McKeel Hagerty: Hi there. Thanks for having me on the show.

Goss: My pleasure. Now, right up front. What is the biggest single mistake that people make when they go out to buy insurance?

Hagerty: Well, when they have a collector car of any kind, whether it’s an antique or a classic car or a hotrod, they typically think that they can just go to their regular car insurer and insure it and get it properly insured. But there’s two fundamental differences with collector car insurance, and that is the type of coverage you buy and the price.

Goss: Ok. Type of coverage, what’s the difference?

Hagerty: Ok. Well, you know the old story when you buy a new car and you drive it out of the dealership and it gets totaled, you won’t get the full replacement cost back that you just bought it for.

Goss: Right.

Hagerty: Well, that’s called actual cash value. Regular car insurance companies depreciate the value of your car immediately after you buy it, but collector cars are appreciating in value. So we sell something called Agreed Value Coverage, and that means we kind of agree on a price and when you come to insure say a ‘65 Mustang for $10,000, we agree it’s worth $10,000 and we insure it for $10,000, and that’s what you’ll get in the case of a loss.

Goss: I see. Now, how do you arrive at that agreed value?

Hagerty: Well, we use a number of sources. Of course being as large as we are in the collector car insurance market, we have a lot of data ourselves, but there are a number of very, very good value guides out there that we use, and we also use appraisals in many cases.

Goss: I see. And that appraisal can’t be something from the corner garage, can it?

Hagerty: No. It’s helpful to have a real expert, somebody with some credentials and uses some comparable autos and some good experience to give us that price.

Goss: Ok, now you mentioned price.

Hagerty: Yes. Well, again, the ‘65 Mustang example. In most states we’d insure that car with a zero deductible for about $100 a year. So very inexpensive coverage. People think somehow it’s a scam, but it’s one of those great deals. Better coverage for a cheaper price.

Goss: I understand. Ok, now cars like this, street rod, sort of modified.

Hagerty: It’s a huge part of the market. We love insuring hotrods and customs, but again, everyone is different. By nature it’s an individual project. So again sometimes appraisals are more useful in determining what they are. But we insure them and people enjoy driving them, and it’s a great business.

Goss: Ok. Now are there other things? If you had to give the viewers one particular bit of advice, as far as insuring their collectible car, what would that be?

Hagerty: Well, if they’re restoring a car or if they’re building a hotrod or custom, and that is keep track of the project. Tell us what you put into it. We can often insure that car for its replacement cost. But you most of all need to go to a specialist, whether you come directly to us to insure your collector car, or go to your agent and say, hey, I heard there’s somebody out there who can help us get this insured in the right way. That’s where you need to go.

Goss: Ok. So having all of the documentation as you’re building it, keep receipts and everything like that.

Hagerty: That’s right. Everything you can provide to us helps us determine value.

Goss: So start a folder and keep all the documentation so you can establish a value, right?

Hagerty: That’s right.

Goss: McKeel, thank you very much for being with us. McKeel Hagerty, Hagerty Insurance. If you have a question or a comment, write to me. If I use your letter, I’ll send you a MotorWeek T-shirt.  The address is MotorWeek, Owings Mills, Maryland, 21117.