13 May 2014

Losses and Lessons: Flash flood turns Nova project into a wash

VEHICLE COVERED: 1972 Chevrolet Nova

WHAT WENT WRONG: Underinsuring your classic is like packing three parachutes for a flight crew of four; there’s nothing to worry about as long as the trip goes without a hitch. But should disaster strike, someone is going to be very unhappy. The owner of a 1972 Chevy Nova knows the feeling. He took his $7,000 project car to a local restoration shop for a complete pro street build and paid as he went. After several months, he’d poured an additional $10,000 into the project to cover an engine rebuild, parts, body work, paint preparation and labor. Then a major storm hit, the local river rose and the shop flooded before all of the cars could be taken to higher ground.

DAMAGE/LOSS: The Nova, and several other vehicles in the shop, suffered severe water damage. As if that wasn’t bad enough, the Nova owner failed to increase the Guaranteed Value of his car as the project progressed. So the $10,000 he put into the car washed away with the flood water.

LESSON: Whenever you invest time, effort and money to improve your car, you obviously increase its value. Don’t waste it. Periodically call your insurance provider to ensure that you’re covered for the car’s full value, especially if your project is advancing quickly. If you’re working on a long-term restoration project, consider the convenience of special coverage. For instance, for a small fee Hagerty’s Vehicle Under Construction coverage ensures that your car’s Guaranteed Value will automatically increase by 10 percent each quarter, up to a maximum increase of $25,000.

4 Reader Comments

  • 1
    Chuck Lebanon PA May 28, 2014 at 12:05
    That,s the one thing Ive always have done, the more money I put into my Mustang, I upped my coverage every year. It does not cost that much. Insyurance is cheap compared tot the the cost of a restoration!
  • 2
    george oregon May 28, 2014 at 12:28
    underinsuring never makes sense and in an extreme case can lead to uncollectible coverage. a few years ago a local guy had a nearly $1 million Bugatti insured for only $70,000. It burned to a crisp but the remains were still worth over $100,000. Had he taken the $70,000 his insurance company would have been entitled to the salvage and would have made a profit on the claim so he chose to collect nothing. I don't know who he was insured with.
  • 3
    mark m pa June 13, 2015 at 10:11
    didn't the shop have insurance?
  • 4
    Ross NM December 2, 2015 at 16:33
    @MarkM, I agree, the shop's insurance should have covered this!

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