It was going to be a six-month project. When the registration came due the car was still on jack stands. In an effort to be frugal you didn’t renew the registration. Surprise. That car is no longer insured.
Once the registration lapses you no longer have a car as far as most insurance companies are concerned. It’s not covered under your collector car policy and it is definitely not covered under your homeowner’s policy.
If your garage burns down, your homeowners insurance won’t cover this project. There’s a basic rule that all insurance companies follow: “If we don’t know about it, we aren’t going to insure it.”
Some of our projects can take years, or even decades. We generally don’t keep these project cars registered with the DMV. The average insurance company is very wary of insuring cars that aren’t registered. Actually most won’t insure them. This means you have to go to the specialty market. You’re actually insuring something that is in storage.
Hagerty points out very clearly that you need to be aware that a general insurance policy for your home does not include coverage for your project car. If an incident occurs it’s important to have a policy specifically for your unregistered project car.
You have to tell the insurance company about your project car and it’s probably best that you send the pictures of the project. It might even be a good idea to do this very early on in the project, while the car still has a suspension and four inflated tires.
The National Corvette Museum Insurance Agency uses a stated value approach until the car is eighty per cent complete. They will work with you on determining the value of a car that’s been apart for the last few years. Once the project is eighty per cent complete you simply call the NCM Insurance Agency and modify your policy to Agreed Value Coverage.
You might be able to make some adjustments to your homeowner’s policy so that your Porsche 911 project is insured but it has to be very clear. If your agent says he can do this, ask for a letter from corporate that explicitly states that your unregistered 911 is covered under your homeowners policy. The agent’s word won’t help much in the event of a fire, or even worse a theft.
Race Cars are Special
Some of you can actually register your racecars with the state. For a lot of us that’s just not possible. Imagine showing up at the local DMV office with your Lola F5000. That means you need something Heacock Classic and other companies call their STP policy. STP means your car is insured while in Storage, in Transit or in the Paddock.
When your car is covered by an STP policy it is covered everywhere except while it is on the racing surface. This includes coverage during transportation, loading/unloading, driving in the paddock and driving between the track and paddock. However, once your car enters the racing surface all STP coverage is voided. When you leave the racing surface the STP policy goes back into effect.
These STP policies are generally limited to competition cars. That means if your racecar is registered for the street it may not be eligible for coverage. These policies also generally carry a deductible of around two per cent of the value. Some companies put a maximum deductible of $2,000 though. The good part is that these policies are pretty reasonable.