Collectors 'R' us
American Collectors Insurance enhances coverage for cherished collectibles,
classic cars, and more
By Elisabeth Boone, CPCU
From bubble-gum baseball cards in a shoebox to a gleaming 1918 Stutz Bearcat, Americans love to collect. Even in the depths of the recession, "collector-mania" was alive and well, says Jill Bookman, chief executive officer of American Collectors Insurance, Inc., in Cherry Hill, New Jersey. Established in 1976 by Bookman's father, American Collectors is a national specialty provider of coverage for a wide range of collectibles and also for antique, classic, and other collector vehicles. [See "Barbies & Baseballs & Bears (& More)" in the July 2003 issue of Rough Notes.]
"American Collectors has been in business for more than 35 years, so we've definitely been through economic ups and downs," says Bookman. "Fortunately for us, collecting is somewhat insulated from swings in the economy. Actually, in times of economic uncertainty there's often increased demand for physical assets, particularly those with intrinsic value. Looking back over recent years, we can see this trend in the prices for rare stamps, books, and fine wines, as well as antique and classic cars," Bookman explains. Even during the recession, she observes, "Demand has pushed up the prices of those and other items.
"For collectors, buying municipal bonds or investing in a hedge fund is all very well, but it doesn't set the pulse racing the same as having a classic Corvette in the garage or original Disney animated art on the walls," Bookman says. "In fact, last October The Wall Street Journal published a feature titled 'Is That a Ferrari in Your Portfolio?' that addresses this point with respect to collector cars."
Also, Bookman says, the Historic Automobile Group International maintains a database of transactions for rare and classic cars, which it describes as an "alternative asset class." Increasingly, she comments, serious investors want to know how rare collector car prices compare with returns on more traditional investments like gold and stocks.
Beyond the homeowners policy
Most individuals who collect truly rare and valuable items know that they need specialized insurance protection that goes beyond the limits of the traditional homeowners policy. That's less likely to be the case for the millions of people who don't have a Ferrari in the garage or an "Inverted Jenny" stamp in their album but who do treasure their collections of less rarefied items. For many of these collectors, it comes as a shock when their agent tells them that their homeowners policy doesn't cover the loss of those rain-soaked trading cards or pay to replace the "Mint in Box" Beanie Baby collection that was damaged as the result of a flood.
"Home is where the heart is, and also where the valued collections are," says Laura Packard, vice president of sales and marketing." Offering clients a specialized policy like that available from American Collectors, she points out, is an excellent way for independent agents and brokers to build loyalty and at the same time protect themselves against E&O claims.
In 2011, American Collectors expanded and enhanced its stand-alone collectibles policy to reflect changes in collectors' needs, Packard says. Numerous categories that previously were excluded are now eligible, such as coins, paper collectibles, and wine. Policyholders can choose a deductible from zero to $5,000, and a wider range of limits is available, subject to underwriting review. Premium discounts are offered for collectors who use central station alarms and/or have high-value collections, qualifying club memberships, and vault storage.
The policy provides agreed value coverage without depreciation for loss from fire, theft, flood, hurricane, earthquake, and accidental breakage. Collectors are not required to provide appraisals or detailed inventories to obtain coverage.
As part of the refreshed collectibles program, American Collectors introduced a "Collector's Choice" option. It covers damage that occurs during shipment of newly purchased collectibles; during special occasion use (important for antique musical instruments or china); while restoring, repairing, or retouching the collection; and while storing the collection outside the home for more than 30 days. Also covered is theft from an unattended automobile.
"Collectibles are the number-one selling category on eBay," Packard notes. "This creates business opportunities for insurance agents. When discussing homeowners insurance, all agents have to do is ask the client: 'Do you collect any items that have a high value or are of significant importance to you?' It's as simple as that."
Even if we're not collectors of antique or classic vehicles, most of us have at least one "dream car," whether it's one we drove in our youth or one we've always fantasized about owning. Collector vehicles run the gamut from the elegant beauties of the early motoring era to the often garishly customized monster trucks of today. Owners of these automotive classics may drive them for fun, restore them, show them, or keep them under lock and key in a climate-controlled storage facility. Like the collectors of everything from Precious Moments figurines to rare French coins, the owners of collector vehicles need insurance protection that isn't available in the standard personal auto policy.
To meet those needs, American Collectors in 2011 introduced several refinements to its specialty collector vehicle policy. In launching the enhanced policy, Packard says, "We've thrown old 'rules of thumb' for collector vehicle coverage out the window."
Coverage is now available for collector vehicles of any year, make, or model; previously a vehicle had to be at least 15 years old. The policy now covers late-model cars including exotics, modern classics, kits, and replicas. Cars no longer are required to be in a closed, locked garage; acceptable alternatives are carports in gated communities and communal garages.
A "Freedom Tier" feature allows a car to be driven not only for hobby use but also up to 7,500 miles a year for occasional general transportation. Collectors who drive their vehicles strictly for hobby purposes can choose mileage limits of 2,500 or 5,000 miles per year.
The TLC Plan provides reimbursement for hobby-related expenses such as emergency towing, roadside assistance, emergency lockout, lost key return, emergency travel expense, car show expenses, theft reward, and stolen personal effects.
Collector cars or car collections valued at more than $250,000 are eligible for a 20% discount on premiums for comprehensive and collision coverages.
Cool cars on video
To support independent agents and brokers whose clients own collector vehicles, American Collectors launched a series of online training videos to help producers identify, qualify, and submit collector vehicle business online. Each of the five videos is between two and three minutes in length, so producers can quickly get up to speed on market needs and products. "The videos highlight the business opportunity for insurance brokers and also showcase numerous cool collector cars, trucks, and motorcycles," Bookman says.
"Car collectors make great clients," she asserts. "Our collector vehicle product has changed substantially in recent years, and this video training program explains updated features and options."
Cool cars also are featured in "American Detours," a Web TV series being produced by American Collectors that showcases great American roads and collector cars. Using input from car collectors via social networking and Web voting, each show will highlight a scenic route as the host and crew drive it with an American Collectors customer. Season 1 of the series is being produced now and will premiere in April.
"'American Detours' is part reality show and part travelogue," Bookman says. "But it's 100 percent designed for the car lovers who are in every insurance producer's client base."
New road for heroes
The people of American Collectors Insurance love what they do: protecting cherished collectibles and cool cars, old and new. Their commitment goes beyond the business of insurance and reaches out to U.S. military veterans who must make the often-difficult transition from active duty back to civilian life.
The firm is the founding sponsor of "The Road Home," a nonprofit organization that provides returning military veterans social, job training, and employment opportunities in the automotive restoration industry.
"The mission of The Road Home is its motto: 'Restoring lives, one classic car at a time,'" says Bookman. Noting that many of her firm's customers are active or retired military personnel, she explains: "We see a strong link between the growing car hobby and the skills of veterans. Their training and experience can benefit employers in the restoration field, who need people with strong mechanical skills and the ability to complete a job as part of a team." She adds: "People in the auto restoration business know the joy of making someone's car whole again. The Road Home offers a chance to change someone's life in a similar positive way."
For more information:
American Collectors Insurance, Inc.
Web site: www.americancollectors.com