From the Front Lines: Classic Cars

Sean Classic CarsSean Shoemake
US Select Insurance LLC
Biloxi, Mississippi

How did you get started in your agency?

My father started his life-health agency, Employee Benefit Specialists Inc., back in 1967. After college in 1992, I came aboard and we primarily sold group insurance and employee benefits. I had always wanted to get licensed for property-casualty, but life-health kept me pretty busy. With the changes in the health insurance industry and reduction of commissions due to health care reform and the Affordable Care Act, I felt it was the perfect time to start our own p-c agency. We started US Select Insurance LLC shortly thereafter.

What is your classic car experience and how did you become a specialist?

I have always had a love for classic cars, but my classic car experience started when I turned 16 with the purchase of my first auto: a 1965 Ford Mustang. Since then, I have owned numerous classic cars. As a classic car owner, you learn to appreciate all the time, energy and money that goes into these automobiles. I also had a pretty good understanding of insuring these cars due to having insurance on mine. Once I started insuring classic cars, all the pieces fit together. I had friends and clients that had classic cars and they knew I was also an enthusiast. They wanted me to insure their cars and I did, then they started telling other owners who started calling. It didn’t take long before insuring a classic car was the easiest policy to quote and bind.

Biggest classic car passion?

I get excited seeing the vehicles, talking to the owners about their vehicle and ultimately insuring that vehicle. It is exciting to know that you are, in many cases, insuring the owners’ "prized possession." It’s gratifying to know they put that trust in you.

What are the biggest changes you’ve seen in the classic car market?

The biggest changes are the increase, decline and upswing of classic and collector automobiles. Classic and collector cars were a hot commodity 10 years ago and their values reflected that. When the economy took a turn for the worse, so did the values of these vehicles. And now that the economy is on an upswing, so are the values of classic cars. More collectors are buying classic coverage because values have risen and they see the need for coverage.

Another big change is that carriers are seeing this as well. We have seen carriers that would only write this coverage if they insured your house, but they are now offering mono-line classic car coverage. They realize there are collections that are worth much more than the insureds’ residence. In many cases, one collector car is worth more.

What do you say to a first-time client looking at classic car coverage?

First, find an agent that is passionate about classic cars. Then look at the coverages. When it comes to classic cars, you want a company that is going to offer you the coverage you want and need. “Agreed value” coverage is very important. This means at the time when you purchase that policy, all three parties—client, agent and underwriter—agree on the value of your car. If there is a total loss, this is the amount the client will receive for that vehicle.

Also, make sure you have a choice of body shops and replacement of parts to get your vehicle in pre-accident condition. I also like a policy with no mileage restrictions. There are many options across different policies, as well as different policies according to the type of vehicle being insured. Examples are classic, collector and modified. Because some clients have a varied collection, you want to make sure you get the right carrier for them.

Any advice for an agent trying to break into the classic car marketplace?

Be passionate about it. You need to have a love for these vehicles. The client does and wants an agent that does also. Most of the time, these vehicles are valued well above the client’s "regular use" vehicles and get a lot of their time and money. They want an agent that has the same appreciation.

Favorite classic car success story?

I have a client that has a collection with both classic and collector cars. When I first looked at his collection, he had the classics covered under a classic car policy and the collector cars covered under his personal auto policy because his classic car carrier would only cover antiques 25 years or older. Since he had his collector cars under his PAP, they were subject to depreciation and had a premium as if they were daily drivers. He now has agreed value on his entire collection with much lower premiums.

You can run into coverage gaps, but there are ways for classic car owners to prevent that from happening:

  • Work with one agent that knows your collection and coverages.
  • Set the same limits for liability and uninsured/underinsured motorists.
  • Review coverages to keep up with the increasing market.
  • Look at the optional coverages available on the policy.

What do you hope to see in the future for the classic car market?

I hope to see the market continue to improve—and I think it will. Over the last few decades, classic cars have only increased in value. Although there have been periods of decline, the market is up dramatically overall. Cars that cost $3,500 just 30 or 40 years ago now cost $30,000 and up. We continue to see record-breaking sells year after year. I do not see the classic car insurance market declining. I believe now is a great time to start selling classic car coverage.

Morgan Smith is IA assistant editor.