A Year After Sandy, Collectors Consider the Lessons

Quick action helped prevent the car’s total loss. Within a day, Mr. Nadler, who drives a tractor-trailer for a living, flushed the engine fluids, preventing the internal havoc that saltwater might cause. His insurance company paid about $10,000 for mechanical repairs and thousands more for a new interior, a thorough cleanup and some repainting.

The work was done by White Glove Custom Collision in Baldwin, N.Y., and Mr. Nadler was pleased to again be driving his Chevy, an icon of the muscle car era, before the storm’s one-year anniversary.

“That car is a part of me,” he said.

Fortunately for Mr. Nadler, the Chevelle was covered by a collector-car insurance policy. Had it been deemed a total loss, as often happens with cars flooded with saltwater, Mr. Nadler’s policy would have paid a guaranteed sum that he and Hagerty, which specializes in collector vehicles, had agreed to when the policy was purchased.

Several companies offer such policies, which also include liability and other types of coverage, and can be later updated to reflect changes in the car’s potential resale value. Collector-car policies typically place some restrictions on the car’s usage, including annual mileage limits, for example.

The importance of buying specialized insurance was probably the most valuable lesson that stuck with classic-car owners in Sandy’s aftermath. A standard auto policy pays what companies define as the actual cash value, which may be many thousands of dollars below the car’s true market value, according to Rick Drewry, senior claims specialist for collector cars and motorcycles at American Modern Insurance. He said the company’s collector-car policies included an agreed-value provision.

“It’s peace of mind that if it’s totaled, it’s a contract price,” Mr. Drewry said. “You know exactly what you’ll get.”

The wording is important. Another type of policy, called stated value by insurance companies, is not the same thing. Although the car owner can set a value for the car, an insurance claim payout could potentially reduce that to account for depreciation since the policy was purchased.

Unlike homeowners’ insurance, collector-car policies typically do not exclude flood damage, said McKeel Hagerty, president and chief executive of Hagerty. It was flooding, rather than wind, that did the most damage to cars in this storm, he pointed out.

That distinction has been a sore point for many homeowners, whose policies covered wind damage but not the destruction caused by water from Sandy’s storm surge.

Mr. Nadler’s Chevelle was one of 1,213 Sandy-related claims that the company addressed. Mr. Hagerty said that more than 70 percent of those were total losses, though many more cars than that were ruined — some 250,000 in all, according to estimates from the Insurance Information Institute.

“We estimate that there were probably 10,000 collector cars at or near total loss,” he said. “It takes three feet or less of water to destroy a car. If it was submerged up to the windshield in saltwater, that’s pretty much a total.”

Valley Stream, a few miles inland from Mr. Nadler’s house, suffered far less, but Kevin Mackay dealt with the effects of saltwater damage to his customers’ Corvettes. His shop, Corvette Repair, assessed 15 newer and classic models. One client lost seven cars.

But for some who asked Mr. Mackay to store their cars before the storm struck, there was good news.

“We picked up about a dozen cars,” he said. “One customer who stored two Corvettes was glad he did; his garage was destroyed.”

Insurance companies judged most of the cars that Mr. Mackay inspected to be total losses. He was able to save a couple, including a 1967 Sting Ray. Water had covered its seats and console but stopped below the fuse box and main wiring harness. A Corvette’s fiberglass body will not rust, but the rest of the car is vulnerable.