Some straight talking, direct from the Editor’s keyboard:
First, let me declare an interest in that I spent a decade working for Carole Nash Insurance, and also have two vehicles insured with them. But that loyalty to my old employer is being tested by the reality of the classic insurance market generally and the emergence of new online brokers and specialists, all keen to offer far more flexible cover than traditional classic insurers have offered in the past.
What am I talking about? Let me put it in simple terms; the classic insurance sector isn’t offering the right products for a diverse and quirky owner group, who may use their classics occasionally, daily, or just attend two or three shows a year and essentially want to protect the future investment value of their pride and joy. In short, they aren’t really using it on the road – so where’s the true risk in this equation?
Here’s the typical offer from a classic insurance specialist;
Agreed Value – send photos in & wait 2-3 weeks for a reply
Annual mileage limit – no brainer, except for modern classics most are not suitable for commuting anyway.
12 months cover – most owners probably want 8 months road use cover a year, maybe less.
European Breakdown & legal cover as standard – few owners of a Morris Minor would decide to drive it to Hungary. UK get-me-home recovery is all most owners require.
Vehicle must be garaged, ideally with security device fitted
Member of owners club – this is great for owners clubs, but where’s the value to car and bike owners? There’s a wealth of tips and knowledge for free online, nobody actually needs to socialise anymore and many do not.
Classic insurance has been this way since the 1990s; closely tied to the owners clubs, call centre based and rigid in its 12 month policies with very similar key terms on the schedule. Frankly, in an online era, that `take it or leave it’ attitude doesn’t cut it anymore. Let me explain why.
THE MANY TRIBES WITHIN THE CLASSIC WORLD
The Super Rich Collectors
There are some extremely wealthy HNW people at the upper end of classic car and bike ownership. A nice Vincent Black Lightning is going to cost you about 80-100K and when it comes to racing Ferraris, Astons or Bugattis…well, how long is your telephone number? These people generally own some type of Jay Leno aircraft hangar, so home security box-ticking, or things like breakdown and legal cover are utterly irrelevant. They could airlift their car back from Monte Carlo if it blew a gasket at a vintage F1 gathering.
These guys – and they usually guys – have often spent 30 years learning all there is to know about a MGB Roadster, or a Velocette Venom and they will NEVER own anything else for their entire lives. They own a shed full of spares and will often ONLY use the vehicle if the weather conditions are set to Michael Palin Sahara levels.
A year round policy is useless to them, because apart from showing off their handiwork at Stafford or Goodwood they may drive under 500 miles per summer. What they require is a policy which has a phone app to activate the road use comp cover on the rare sunshine Sundays when the mood takes them, and the rest of the year all they need is theft, damage and laid-up cover for vehicle and spare parts stash.
The parts cache can often exceed the value of the vehicle itself by the way. For example, a battered reproduction fuel tank for a Brough-Superior sold at Bonhams for £997.
So a disruptive player in the classic market in 2018 should be offering the chance for users to upload photos of their spares haul, and agree a value on those parts too, because the fact is, they ain’t making anymore original parts – so those who have them are sitting on solid gold.
The Show Men
Attending a show is a highly competitive beauty contest; think Tinder for blokes with beards and shares in Autoglym.
These owners primarily want an event insurance package, tied to the auction value of their A1 mint condition vehicle. Laid up cover of course, but protection during transit to and from shows is a big selling point with this crowd.
The Accidental Classic Owner
This is the modern classic sector, or old cars to you and me. Often they were bought on a whim during summer and are worth £1500-£3000, so very few owners will carry out a full 10K restoration on it. If it’s a classic motorcycle then owners will want summer use only, maybe even pay-per-hour, because they almost always have another modern vehicle for daily use.
The main reason they own these 15-25 year old bangers is that they hope the vehicle will rocket in value and they’re looking to cut costs to the bone because it’s a waiting game.
THE GOLDEN OPPORTUNITY
The opportunity for new companies to offer flexible, instant cover which matches the needs of all the various tribes within the classic world, is there for the taking. It has to be seamless, online and powered by AI when it comes to valuations and understanding emailed photos. The day of the year-round policy is coming to an end.
Things like facial recognition software can revolutionise the `let your mate have a ride’ temporary cover, if new players are willing to embrace it. Trackers linked to smartphones and garage/shed based internet devices can also help protect spare parts, as well as vehicles themselves.
Imagine a policy which covers a fleet of vehicles, that doesn’t penalise owners for buying and selling vehicles before the policy end date, and rewards those who are happy to arrange their own breakdown and repairs – many of them already do this via the club/classic shows grapevine.
How about insurance that lets you hire out your classic, like AirBnb? Agencies, TV companies and event management companies often want classic `props’ to decorate a set, but they have to do the donkey work when it comes to arranging insurance – and insured transport. Let the owners become entrepreneurs and let them unlock some of the revenue potential within their classic asset.
Make these changes, offer these innovations, and you will have a happy classic customer, more likely to stay with you for years ahead, rather than shop around every renewal date.