The improving economy comes with plenty of side effects, and if your agency sells specialty lines, one of them is that your clients have more money to invest in collectibles like classic cars.

Rick Drewry, collector car and motorcycle senior specialist at American Modern, says we’re currently in a “buyer’s market” for classic cars—especially when it comes to older models whose biggest fans are now comfortably in retirement.

“The market is actually a little bit soft right now on 1950s American cars, so there’s going to be some bargains, as well as the pre-1949 street rod and hot rod crowd,” Drewry points out. “You’ve got an older generation who’s leaving the Gen Xers and millennials to pick up the slack.”

But as older models like Model T Fords start to sell for “pennies on the dollar of what they used to be 10-15 years ago,” Drewry says, other collectible vehicles are taking their place—and it’s all thanks to constantly evolving demographics in terms of what constitutes a classic car enthusiast.

“The hobby has become multigenerational, and it has become global,” says Paul Morrissette, senior vice president at Chubb. “When you go to auction week in Monterey, you see both men and women of all ages from all kinds of cultural backgrounds. It would be a mistake to just pigeonhole a certain type of person as being a car collector.”

The Modern-Day Collector

Jim Kruse, director of Condon Skelly Collector Car Insurance, says he’s seeing “more cars coming off the production line as collectors than ever before.” From the latest Dodge Demon to the persistently popular VW Beetle, which Kruse calls an “entry-level collector car,” vehicles no longer have to be several decades old to qualify as collectibles.

And that means just about anyone could be behind the wheel. With a Love Bug, for example, “we’re seeing typically younger families with those, because the price point of entry is so low,” Kruse points out. “But from an agent’s perspective, that client will grow with you. Today it may be a $5,000 Beetle, but 10 years from now it may be an air-cooled Porsche, which goes for $250,000.”

In addition to seeking out different types of models, “the younger generations are more into modifying cars,” Drewry says. “Maybe someone wants that 1970 Chevelle because they love that body style, but they get it with a brand-new crate engine—that’s the same drivetrain as a brand-new Corvette. You’re getting muscle cars that are modified—’60s, ’70s and ’80s cars that are bringing in very good money and keeping the hobby alive.”

From a value standpoint, “it used to be that an all-original was the crème de la crème—that’s where you’d get the most money,” Drewry adds. “But nowadays, you get one that’s modified and tastefully done, it’s bringing in more money than an all-original piece. If it was still all about getting an all-original piece and maintaining history, there would be a lot of people who wouldn’t be interested.”

Finally, among younger drivers, Morrissette also notices an increased interest “in actually wanting to drive and enjoy the cars, in addition to occasionally showing them.”

That’s resulted in more organized tours, such as the California Mille and the Going to the Sun Rally in Montana: invitation-based 1,000-mile rides over the course of a week for vintage sports car owners. “These are fascinating machines,” Morrissette says. “They’re capable of making you feel visceral about driving in a way that a modern car can’t.”

Different Needs

How does all that transform your role as an insurance adviser? In the event that your client is interested in the aforementioned rallies, make sure you find a policy that isn’t too restrictive in terms of geography and mileage per year.

“Today’s collector car might get driven a few thousand miles a year, and it might be driven somewhere very far from home,” Morrissette points out. “A good policy will return the car back to the home state in the event of an accident, it will offer generous roadside assistance coverage if you break down on a rally, and it won’t limit your mileage. That’s what today’s consumer demands.”

But Kruse warns today’s collector may not be as experienced as yesterday’s. “You can make mistakes with those cars, and they’re all going to be expensive mistakes,” he says. “Like anything that’s exotic, whether it’s a dog, a gun or a Lamborghini, you have to take care of it and maintain it, otherwise it’s going to bite you.”

In other words, there’s no harm in talking to your client about whether they’re actually prepared to drive their new toy. As more and more people find themselves capable of affording a $1,500/month lease payment, not everyone who’s behind the wheel of a high-performance vehicle necessarily views it as a long-term commitment.

“If a client comes into your office and lays on your desk the paperwork for a car that you know is completely not within the normal realm of what they’ve ever driven in the past, it’s OK to say, ‘Hey—be careful,’” Kruse says. “You’re not just an insurance adviser—you’re also a risk adviser at the same time. Just remind them this is a fast car, and it can be dangerous. One word of caution like that might make the difference between somebody having an accident or not.”

Changing collector demographics also mean you may be missing the opportunity to write a specialty policy if you’re not looking hard enough. “You really want to ask every single customer, ‘What do you own? Do you have jewelry? Do you have fine art? Do you have a collectible car? Do you have vacation homes?’ That should be part of the overall account review,” Morrissette says. “You will probably be surprised what you uncover.”

You may even have potential new business lurking in your current book. “Most personal excess liability policies have a list of all cars that are covered, so a simple search through your management system for cars might yield model years that are more than 25-30 years old,” Morrissette suggests.

And remember, many carriers will write a classic car policy for a brand-new car, as long as it’s a “future collectible,” Drewry says. “The key is whether it lives the lifestyle of a classic car. Is it garage-kept and occasionally used? We do not want to insure a brand-new Mustang GT if they’re going to take it to the grocery store and drive it back and forth to work. We want the brand-new toy if somebody babies it like it’s a ’55 Chevy.”

Jacquelyn Connelly is IA senior editor.