Insurance 101

Everyone knows we’re required to purchase auto insurance to drive our cars legally. But that doesn’t mean we can’t wonder where our hard-earned money is going as we sign on the dotted line.

When it comes to specialty insurance, premiums generally include the same basic coverages as standard insurance. But as special coverages for special cars come into play, that’s where the similarities often end.

Now every insurance company operates a bit differently, so we’ll use the insurance Hagerty sells as an example, because that’s obviously what we know best (and let’s be honest, we think it’s pretty darn great).

First, here are the basic coverages included on most insurance policies, no matter the type or age of the car.

Liability. If you cause an accident, Liability insurance will cover injuries to other people—known as bodily injury—to put toward their medical expenses, funeral expenses, lost income, etc.

It also covers damage to property, such as the person’s car, or the fence in someone’s yard (among other things).

Uninsured motorist. This coverage protects you if another driver causes an accident and they don’t have insurance (or enough insurance) to cover your expenses.

Physical Damage. This coverage relates to your own car or vehicle and it’s broken down into collision and comprehensive. Collision covers your vehicle if it literally collides with another object (such as a car or tree), or it rolls or turns over. Comprehensive covers your car if it’s damaged by something else apart from a collision, such as natural disasters, falling objects, or animal damage.

No Fault or Personal Injury Protection. This type of protection helps pay for your own medical expenses and lost wages when you’ve been in a covered accident, no matter who caused the accident.

Now that we’ve covered the basics, we can explore a few of the special coverages that define specialty insurance.

Agreed Value. Almost all established specialty insurers offer something called Agreed Value coverage, in which you agree on a price with your insurance provider -- and if you’re involved in an accident that’s a covered total loss, you receive the full amount of your car’s insured value less any deductible or salvage value if you keep your car with no depreciation*. If you own a classic or a vehicle that’s collectible and increasing in value, Agreed Value is a no-brainer. Here at Hagerty, we refer to it as Guaranteed Value® coverage, though it’s the same type as Agreed Value. It includes all taxes and fees unless prohibited by state law.

Spare Parts Coverage. This is another extra you should be on the lookout for when comparison shopping for insurance. Chances are you may have some extra parts laying around if you own a collector vehicle, or if your vehicle’s in a continual state of restoration like many classics are. This coverage protects those valuable tools and spare parts needed to keep your automobile operating at its best.

Auto Show Medical Reimbursement. If you’re the type to hit up a few auto shows each year, there’s coverage available for that, too. If you or your family member were somehow injured while attending, some or all of your medical expenses could be reimbursed.

Roadside Assistance. This benefit is worth its weight in gold, especially when you’re stuck by the side of the road on a cold, rainy night. If not just any old wrecker will do, make sure a flatbed truck comes to save the day and that they know to take extra special care of your favorite cars.

Some cars demand coverage that was created for certain conditions—like, say, a race track. Driving a tank is another one. (Yes, people actually do this. Lots of them.) How about an antique tractor? Portfolios of vehicles worth over $500k? Traveling the globe with several cars in tow? Coverage exists for all of these scenarios, and much more.

Wherever you buy your insurance, remember to always discuss how you use your vehicle(s) to ensure you receive all of the proper coverages for your situation.

Here’s a list of just some of the types of protection we have to offer you at Hagerty. And all the other the perks? Stay tuned for future articles.