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What is Agreed Value Insurance?

Agreed Value Insurance – Insuring a Million Dollar Corvette

Agreed Value Insurance – Insuring a Million Dollar Corvette

I’ve always had a special attachment to Corvettes. My brother owns a C5 Z06, my father in law daily drives a C6, I’ve got two close friends with a C5 and a C7, and I’ve almost bought one… twice. I’m actually shopping for a C7 now but I think back to when the C5 Corvette (1997 to 2004 model year) hit the streets in mid-1996. Every teenage boy with a newly minted driver’s licensed tacked a Corvette poster to their walls. I was 16 at the time, so I always saw this car as a way to look forward into the future of sports car design with it’s raked windshield and sleek body lines. But what would one of these cars be worth today? To take it a step further, what about the last C5 ever made? Would it be worth more than the second-to-last C5 to come out of the Bowling Green Assembly Plant? The answer to that last question is yes. A million times yes.

Agreed Value Insurance for million dollar corvette
Chassis #34064 is now up for auction. It's the last C5 Corvette ever produced and could fetch a price upwards of $1,000,000. (SOURCE: buyavette.net)

It looks like chassis #34064, confirmed as the last production C5 Corvette made, is now up for auction at buyavette.com and it’s going for a cool $1,000,000.  The car is uniquely plain, to say the least. A non-Z06 car with an LS1, an automatic transmission, and light gray interior can be found on loan at the Corvette Museum boasting it’s original production line interior plastic protection.

How would you insure a car that is both special and rare?

Before we get into how to insure something like this or any other car of value, we should probably talk about how not to insure it. You do not want to insure this on a regular car insurance policy. Typically, car insurance offers replacement cost coverage for a like kind or model upon a total loss. Since we’re saying that these vehicles are special, for one reason or another, regular replacement cost car insurance doesn’t make a lot of sense to insure a unicorn like this. Had our million dollar Corvette been insured with a regular policy, the policy would simply pay out around 16,000 dollars to replace the vehicle with another 2004 Corvette. Any  2004 Corvette with similar miles on it. The insurance company doesn’t care, with a regular car insurance policy, that this vehicle is rare or special. They’re going to pay out the going rate for one on the open market.

What Is An Agreed Value Insurance Policy?

An Agreed Value Insurance Policy is a policy where you, as the owner of the vehicle, and the insurance company can come up with an agreed upon amount that the vehicle is worth. That way, upon an accident or a total loss, the policy will pay out the previously agreed upon value. Agreed Value Insurance Policies are not available from every insurance company but we do represent a few insurance carriers that play very well in this space such as Hagerty, Chubb, and a few others.

What Kind of Cars Would Need An Agreed Value Insurance Policy?

We use Agreed Value Policies at CoVerica when we talk with our clients and discover that the vehicle is different than the vehicle that was produced before it or after it on the assembly line. At CoVerica, we’ve insured some very rare vehicles at agreed value with a few of our insurance companies. Here’s a quick list of some I can remember off the top of my head.

  • A client called us with a vehicle addition to his car insurance policy. He had just purchased a 1997 Ferrari F50. One of 359 ever made. Since this car was a limited edition exclusive from Ferrari, supply of the vehicle on the open market was fixed. In fact, you could even say that supply was diminishing since every year, one or two cars would be totaled in an accident. The car was valued at an agreed upon amount with his insurance carrier far and above the sticker price of $500,000 dollars. The Ferrari’s value was even further boosted because it was so difficult to even purchase one of these cars new. Prospective buyers need to have previously owned two Ferraris and had to agree that they would not modify the car beyond the way Ferrari had designed the F50. One of these 2,249 pounds, 513HP monsters even sold at auction in 2016 for a mere $2,000,000 which shows how critical it is to insure the vehicle at an agreed upon amount.
  • We had a client, who will remain nameless, who liked to collect 1950’s to 1960’s vintage, open-wheeled, F1 cars. Since these vehicles are extremely limited, finding a like kind or quality vehicle would be extremely difficult. The vehicles had to each be appraised by a professional automotive appraiser and insured up to that value. Interestingly enough, when the owner would find a vehicle, he would travel to Italy to inspect and purchase the car so we also needed to find an insurance policy with worldwide coverage. This resulted in us buying insurance in an Italian insurance brokerage at midnight on a Friday night. It made for a great story to tell the client.
  • It was brought to our attention that the car that was originally slated for regular insurance policy was, in fact, a 1969 Camaro 427 COPO with all numbers matching. COPO, or Central Office Production Order, was a way for clients to order cars with unique options not available to the general public. This one such car came equipped from the factory with a 427 cubic inch engine that was normally found in a truck. One sold at a Barrett-Jackson auction for 330,000 dollars while a non-COPO car could find you parting with $80,000 dollars from your child’s college fund.
  • We have some clients that like to go fast and sometimes purchasing a 2007 Z06 is not enough. The car in question was punched out to a 440 cubic inch stroker motor force fed with a YSi blower. On top of the $67,000 MSRP, the client had racked up another stack of receipts worth nearly $50,000 dollars in performance modifications. Had the car been totaled, a regular insurance company would have capped his modifications to around 1,500 dollars but since the car was on an agreed value policy, he would have received the full amount of the car PLUS modifications.

How Much Is An Agreed Value Insurance Policy?

Agreed value policies can vary in price based upon the value of the vehicle in question. They’re going to run more than a regular insurance policy for a car, but it is the only way to know that the car is insured to its full, actual value. You may also see some limitations placed on the car in terms of yearly mileage and a request for a third-party appraiser to see and value the car. In extreme cases, we’ve heard stories of cars being equipped with GPS tracking units that are monitored by the insurance company. From a price standpoint, I’ve seen car insurance policies for vehicles under a 1,000 a year but could increase with both value and miles driven each year.

Need Help Insuring Your Car With An Agreed Value Insurance Policy?

Just let us know and we’ll walk with you through the quoting process to find a policy that is just right for you and your special car. You can call us at 972-490-8800 or simply drop us an email at contact@coverica.com. We’ve got a few markets available depending on if the car is an antique, vintage muscle, or a high-valued exotic.