In September 2015, IA ran an article called “3 Reasons You Should Never Insure a Classic Car with a PAP.”

The article outlined the major benefits of using a classic car insurance policy rather than a personal auto policy, including greater coverage at a lower price thanks to agreed rather than stated value; better options for vehicle restoration; and greater expertise when it comes to claims handling.

But a few readers disagreed with the message of the article. In particular, they pointed out that most classic car policies include exclusions for driving the car for pleasure, and cited a lack of built-in inflation coverage for agreed value.

So is a PAP ever appropriate for a classic car? The short answer is yes. The long answer is more complicated.

“The person who says there is a place for PAPs for collector vehicles, that’s absolutely true,” says Jim Kruse, director of Condon Skelly Collector Car Insurance. “If you get somebody with a new Corvette or a new Porsche, it may qualify for a collector policy because they’re not using it for general transportation. Great. But if they are going to use it for back and forth to work and things like that, that’s where your PAP comes in.”

“It’s important to be aware of mileage plans and options,” agrees Rick Drewry, senior claims specialist, collector cars and motorcycles at American Modern Insurance Group. “Having a one-size-fits-all program does not enable an agent to offer the best coverage or the best price for the customer.”

While different programs offer different levels of coverage, many limit usage of classic cars with exclusions pertaining to mileage, storage and more. However, Kruse says many companies “are actually loosening up their guidelines from a coverage perspective and becoming a little more flexible if you want to drive your car to work every once in a while.”

American Modern, for example, offers an unlimited mileage plan, as well as “to and from work” and “occasional pleasure use” coverages that allow the collector to “enjoy the car the way they want,” Drewry says. “It’s unrealistic to expect a person to only be at a car show or a parade.”

Jeff Walker, team leader and senior collector vehicle insurance specialist at Chubb, calls his company’s usage guidelines “lenient.” He explains, “We understand that collector vehicles need to be driven with some regularity in order to maintain them. As far as pleasure use is concerned, generally our underwriters are OK with pleasure driving. I don’t think people should stay on a PAP with their classic car out of fear that they won’t be covered if they go out and get an ice cream cone on a Friday night with their family.”

Some of your clients, however, may want to use their collector or classic vehicles on a much more regular basis. “From time to time, we get people who say, ‘I want to use my old Volkswagen Beetle as my daily driver,’” Walker says. “And in certain parts of the country, that makes sense—if it’s nice all year round, there’s no reason why people shouldn’t use their car as they wish.”

The problem is finding a balance between securing proper liability and uninsured motorist coverage in the event that a driver is involved with an accident in a regular use scenario—typically the wheelhouse of a PAP—and securing the right agreed-value coverage or valuation method for that particular classic vehicle, Walker says. “So while they may be insured properly in a third-party situation on a personal auto, the valuation of their actual vehicle may not be where it needs to be,” he summarizes.

Here, the advantages of a classic car policy are clear: Most operate based on agreed value, which means your client won’t suffer any depreciation on their value in the event of a loss. “Collectors want to know what they’ll be getting if their pride and joy gets totaled,” Drewry points out. “Compared to stated value, agreed value also gives peace of mind that collectors know what they will be getting if the car is a total loss.”

But does an agreed-value classic car policy take inflation into account? “I can’t speak to all the programs, but I think most of us have an inflation guard built in,” Kruse says. “Ours is 4% per year, so that’s typically not a big issue.”

“With inflation guard, the value will increase through the policy period until it is up for renewal,” Drewry agrees. “At that time, the owner can choose to increase the value if the market is changing.”

As a rule of thumb, it’s a good idea for both you and your client to keep an eye on classic car values, which can change daily. In fact, Kruse has one employee whose sole responsibility is tracking valuations. “It happens that frequently,” he says. “We always encourage people to continually look at their values, and they can call us at any time and say, ‘I’m underinsured, please can you increase our agreed value?’ We do that all day long.”

“From an insurance perspective, the marketplace is responding to that desire of the collector, because a lot of this is obviously keeping up with the values,” Walker agrees. “The vehicles have to be properly insured.”

When in doubt, just ask. “If you’re really not sure whether a client should go on the standard PAP or with a company like ours, we always tell people to pick up the phone,” Kruse suggests. “Call your underwriter and ask the question. That’s all they have to do, especially for those borderline types.”

“Don’t make the assumption and not do anything,” Walker agrees. “Just ask the question.”

Jacquelyn Connelly is IA senior editor.