Since I don't want to deal with mileage and use
restrictions, I still have them covered under my normal policy.
Standard auto policies are Actual Cash Value (ACV) where you and they
determine the value of the car at the time of the loss. This works out
just fine for commodity cars that are for sale everywhere and there are no
customizations. When you get into customized and/or rare cars, you can
run into issues.
This is a great point to talk to your agent
about. See if they have an estimated value for your car and see how
far away from what you think it should be that they end up. Ask about
customization and improvements and if they take those into account. If
you buy a $1,500 set of wheels and $1,000 tires the day before a wreck, will
they add that to the value? What about a three year-old $5,000 paint
job? Custom suspension, engine, interior?
You either need a really good agent, or you need a
special policy such as the agreed value. The only danger with agreed
value is that you need to keep up to date on this. If you have the
value set and then make upgrades to the car, you need to change the value.
You also have to adjust for increases in value. If Clint (just for
this example) does not do this and the car is really worth $35,000 when it
gets into a wreck, the insurance company will pay him $25K and satisfy all
their obligations.
There is no right or wrong answer, as every
situation is different. No matter what, I do recommend you get an
agent that loves cars and understands your own love of cars. Then talk
with them about possible situations and expectations. If they think of
cars as means of transportation, you will not get the support you need when
it comes time to have them work for their money.
Brad
