Owners of classic or collectible cars often find themselves in something of an adversarial relationship with their insurance companies. Many new owners of specialty cars simply tack the vehicle on their regular coverage only to find out, generally when they file a claim, that to their insurer that beloved beauty is just an old car with a low Blue Book value.
The best avenue for owners of truly special machines is to go with one of the classic car insurance companies like Hagerty, Grundy, or American Collectors Insurance. Regardless of the insurer used, however, the owner must be prepared to negotiate from a position of knowledge, both about the automobile itself and about two types of insurance coverage, "stated value" and "agreed value." Both carry distinct advantages and disadvantages.
Stated Value Policies
Stated value coverage pays the cost of repair to the car or the stated value of the car, whichever is less, at the time that a claim is filed. There are a number of problems with this type of policy:
The stated value is actually used only to determine the premium level. The higher the stated value, the higher the premium.
In the event of a claim, the language of the contract allows the insurer to set an actual cash value instead of paying the stated amount as the insured party was given to believe.
Essentially, the company accepts the owner's stated value at the time the policy is issued, but does not issue any formal agreement with that value in the event of a claim. This gives them considerable leeway in honoring the benefits of the coverage. It's a rule of thumb in insurance that the company will always pay the least amount possible.
Agreed Value Policies
Agreed value guarantees a set amount of coverage agreed upon at the time the policy was issued and is generally accepted as the best position for the owners of classics, unique, or highly modified vehicles. It carries a number of advantages:
Allows the driver to secure and present a professional appraisal of the vehicle that they accept as a valid representation of its worth.
Unlike standard insurance, the value of your car does not depreciate over the life of the policy.
Is the only type of coverage that guarantees the owners will be paid in full in the event of a loss.
Obviously agreed value is the prime position. By going with a classic or specialty car insurer, the driver may have to accept some limitation on driving time, but most of these companies are generous with their leisure driving allowances, especially if the car is well-protected and maintained. Insurance companies like to know a car is securely garaged and protected by anti-theft devices.
By being a knowledgeable negotiator and getting at least three comparison quotes, classic and specialty car owners can find coverage that is both comprehensive and affordable. The trick is to go with a company that appreciates the vehicle's intrinsic value from the start and that specializes in writing unique insurance products.
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New health care reforms will change your options over the next few years. But for now, health insurance and financial experts say, unemployed workers have an array of post-COBRA options for medical coverage.
Here are a few health insurance alternatives experts recommend:
1. Sign on to your spouse's plan
Joining a spouse's plan is often the cheapest and most comprehensive option for medical and prescription drug coverage.
"Anybody with a working spouse should try to get on that spouse's plan,'' says Phil Lebherz, the founder and executive director of the Foundation for Health Coverage Education in San Jose, Calif.
Mark Cesarano, a former corporate COBRA benefits administrator, says turning to another employer group plan through a spouse offers "best benefits at the lowest rates.''
But there's one major roadblock to this approach: Unemployed workers typically can join a spouse's plan only during the company's annual open-enrollment period.
2. Buy an individual plan
Under the federal Health Insurance Portability and Accountability Act, or HIPAA, your former employer's health insurance carrier has to offer you an individual medical insurance plan after COBRA coverage expires, Lebherz says.
Typically, the insurer that continued your health benefits via COBRA will mail you a letter explaining HIPAA coverage options. Lebherz urges people to ask the carrier about the coverage at least a month before their COBRA is set to run out.
There's nothing to preclude you from shopping for a private health insurance plan with another insurer that may cost less or better suit your needs. However, the HIPAA protections allow you to buy a plan from your former employer's health insurance carrier that has no expiration date like the COBRA plan, meaning you can keep the coverage as long as you need it, provided you pay the premiums.
In addition, your former employer's health insurance company must cover any pre-existing medical conditions, something not true of other private plans.
Jobless workers who buy individual insurance should not expect it to be as cheap as their former work-based plan, says Cesarano, a managing consultant for The Savitz Organization, an employee benefits firm in Philadelphia. "Don't expect to get the same type of coverage at the price your employer offered, because your employer had the power of group purchasing,'' Cesarano says.
3. Buy coverage through your home state
All 50 states offer public medical coverage options for qualified adults and separate low-cost medical coverage for children, Lebherz says. However, there are eligibility requirements, so not every resident qualifies.
The Foundation for Health Coverage Education has put together an online database with information on what public medical coverage options are available, Lebherz says. You can review the data here.
"On our site, you can start by taking our quick, five-question eligibility quiz to help point you in the right direction for coverage options and eligibility requirements in your respective state," he says.
Matt Tassey, a principal with Scribner Insurance in Portland, Maine, and a past chairman of the nonprofit Life and Health Insurance Foundation for Education, says a state's insurance bureau or department is a good place to start if you have questions about medical insurance options.
4. Check trade groups and associations
Many business groups, local chambers of commerce and even college alumni associations offer members medical coverage, experts say.
Trade groups can help you get discounts on health care, says Robert Laura, a registered investment adviser in the Ann Arbor, Mich., area who also helps clients find ways to pay for health insurance.
"Sometimes business groups can drop you into a group pool," for coverage, Laura says. "Try to get yourself in a group or discounted situation to offset health insurance prices."
Trade groups that offer health insurance typically cater to small-business owners. So someone who starts a business or works as an independent contractor is more likely to be eligible for benefits, Cesarano and Tassey say.
5. Qualify through Medicare or Medicaid
Individuals who are at least 65 years old and not planning to return to work or who are disabled at any age (according to Social Security Administration rules and definitions) qualify for government-sponsored Medicare health benefits, Cesarano says.
Individuals with household incomes low enough to fall within federal poverty guidelines can apply for Medicaid through their respective states.
This article was reported by Paul Bomberger for Bankrate.com.
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