Restored car ‘return to invoice’ insurance(?)

[Turbolader]

Evening, wondering if someone here could help. I’m getting towards the end of a yearlong nut and bolt restoration of a mk2 golf GTI. It’s had far more money spent on it than its market value on its best day, but I am very fond of the car and that is the way of things.

My question is, is it possible to find an agreed value provider that would pay out on the value of the restoration invoices?

Or is there such a thing as a restored car GAP product, should the car be stolen or written off?

Thanks in advance.

[randlemarcus]

Interesting question. I can't see anyone going beyond the market value, which on theory would restore you to the position pre-incident, but these days, some bugger will sell you anything

[Turbolader]

Yes you’re right about that.

I suppose there’s a philosophical thing too which is if there was a loss and they paid to the agreed value, I’d end up trying to find a similar car that had had far too much love lavished on it.

[restoman]

I would have thought insurance companies allowing customers to insure cars for more than their market value would be open to abuse . . .

[Turbolader]

restoman said:

I would have thought insurance companies allowing customers to insure cars for more than their market value would be open to abuse . . .

Presumably that’s why products like GAP are provided by separate companies.

[MitchT]

Interesting question and one which has occurred to me too. I have an old E36 3 Series which I've owned from new. Probably worth about £1k in its current condition. Possibly worth £6k mint. Estimated £15k+VAT to get it to mint. If I were rich I'd just do it, but I'm not so I can't afford to spend £18k restoring a car that'll only be valued at a third of that, at best, if it's written off.

[NiceCupOfTea]

I'm in a similar situation with my Saab. Really hard to pin down values, but I suspect if I tried to sell it it would realistically make the low 10s with the right buyer. However, some people suggest they are worth much less, some seem to go for £15k and even into the £20s. Spent a huge amount on a partial resto a couple of years ago, once we realised the enormity of the task we were committed. Currently insured with an agreed value of £15k. Insurance company agreed it was impossible to pin down an accurate value, but were happy to commit to that value with a few photos. They confirmed that, should the worst happen, there wouldn't be a debate to enter into over the value to pay out. I have no idea what would happen, but what can you do? I have no plans to sell, so it is immaterial in some respects, but I know if the garage burned down I would be seriously out of pocket...

[sunbeam alpine]

I'm in Belgium and there is a system over here which may be close to what you describe. It's not done by the big insurance companies, but by smaller firms specialising in classic insurance.

How it works is that the company sends one of their valuation specialists to examine your car. Obviously it helps if you have loads of photos of the car during the restauration to back up all the invoices you have. You have to pay for this visit (about €300) and his judgment over the price/value of your car is final. I'm not sure that it would enable you to recover all your costs, but the guys who do this are generally enthusiasts and it gives you the chance to discuss the valuation and you get to put your point of view. If you accept this valuation you can proceed with the insurance but it's not cheap!

The companies offering this service are present at most big classic car shows, so that might be the place to start looking to see whether something similar exists in the UK.

[twibs]

Give need 2 insure a call, I think they offer similar based on receipts for parts.

[sixor8]

Some classic insurers will accept owners club valuations for the 'agreed' value. IME, these are often on the 'generous' side.

I had a payout on a stolen Lotus in 2001 and the 'agreed' value as paid out minus excess, but it was more than I'd paid for the car! I thought the 'betterment' clause may disallow it. If you have significantly improved a car's condition, it will be acceptable to some classic insurance brokers to cover it for more than the purchase price. After all, some cars rocket in value just locked up in a showroom.....

[Yertis]

MitchT said:

… I can't afford to spend £18k restoring a car that'll only be valued at a third of that, at best, if it's written off.

Oh that I shared your wisdom

I think very few of us that inhabit the lower, in my opinion more interesting, echelons of the classic car world realistically expect to get our money back in any circumstance.

[Turbolader]

Great advice tonight, thank you. I think ‘get the highest agreed value I can then go carefully’ is the watchword once it’s back on the road.

[sixor8]

There's a sad thread on here somewhere about a chap who spent a fortune on an old Karman Ghia (maybe VW Fastback?) and it got rear-ended on the road before he had the chance to up the agreed value.

So, yes, going careful is good, shouldn't we all?

[Old Merc]

The “market value” on a restored modern classic is the amount anyone is willing to pay.
Just go through the procedure when taking out an agreed value classic car policy. They will ask for a number of images, full description of work done etc etc. When the insurance company agrees with YOUR valuation that’s it you’re covered.

[v8250]

Turbolader said:

My question is, is it possible to find an agreed value provider that would pay out on the value of the restoration invoices?

Thanks in advance.

The answer is yes, but it takes a little time to complete. I have two classic vehicles, one has a total cost to me of £24k with a market value of £30-35k, the other a total cost to me of £23k with a market value also of £30-35k. In both cases I have restored/rebuilt the cars myself and the value to me excludes my rebuild hours, but the insured values are quite different.

Car#1 has an agreed insured value at market rate of £35k.

Car#2 has an agreed insured value of £62k as this is the minimum cost of total rebuild should the car be totalled and a 100% like-for-like replacement needed. This car is a highly modified vehicle using high cost/specification components [In reality, it would cost more for total rebuild due to current increased labour costs so I need to address this].

In both cases I have issued very detailed photographs of both builds and completed cars, plus copies of all invoices/receipts to the insurers. This ensures there's no ambiguity should there need to be a claim made.

Most classic car insurers understand insure to build costs are different from simple current market valuations, though many of us automatically benefit with rising market values. It would be worth contacting specialist insurers like Hagerty, Lancaster, A-Plan, Carole Nash and/or others to talk this through. Also, does the VW Golf owners club have a discounted rate with club recommended insurers? If so, they will have experience of insuring classic/historic VW models where total cost is higher than general market rate, especially where the car is in true concours condition. The club should also be able to provide a value inspection for insurance purposes.

[dpp]

I have restored some classic cars and with my recommendation on replacement cost of the cars to their insurance companies have with little trouble achieved agreed valuations far in excess of market values.

You need to talk to your insurer as it is the cost of replacement for your car and if it has been fully restored to a high standard then that is what you should get in the event of a total loss.

My own car was fully restored 10 years ago and I have always had an agreed value above market value and this has not been a problem even when changing insurers.

[Turbolader]

Thanks again - first time I’ve posted on PH (lurked for many years) and it’s great the forum is still so active.

I need to find a day on the phone to get this sorted but very reassuring.