Getting an Appraisal for your Triumph
By Allan Lewis – Vintage Car Connection
This article first appeared in the Toronto Triumph Club magazine - Ragtop in April 2004.
A modified version appeared in the MG Club of Toronto magazine - Octagon in October 2004
The subject matter is suitable for any type of vintage car.
Whether your are brand new to the collector car hobby or you have owned your Triumph since it was new, getting your vehicle appraised for insurance purposes is a necessity to ensure you are insured properly.
As our cars age the disparity between the condition of very good cars and very poor cars increases. Book values for vintage cars can vary by huge amounts based on the condition of the vehicle. Because of this your insurance company requires an independent third party to inspect the car, produce a report detailing its condition and determine an appropriate value. It’s very important to hire a reputable appraiser to put a value on your Triumph.
OK, seems simple enough. However, the antique vehicle appraisal industry in Ontario is not government regulated in any way. Anyone can hang a sign saying they are an appraiser and start producing reports. If the report looks professional enough most insurance companies will accept them no questions asked. If an appraiser claims they are government licensed – guess what, there is no such thing. What they may have is a Ministry of Finance number (MFO) which permits them to fill out a single page MTO form. This form is used when a newer cars purchase price is below the wholesale book value and the buyer does not want to pay the tax on the higher value. There is nothing wrong with an appraiser having an MFO number it’s just not much use to us in the vintage car world. (Update November 2004 - the Ministry of Transportation now requires an appraisal for any antique car vehicle transfer. An MFO number is required, but only for this purpose. It is by no means a form of appraiser licensing or a guarantee you will get quality work. The requirements for a Ministry of Finance appraisal are far below that of the insurance industry.)
So what could go wrong? The appraisal has been done and accepted, your car is on the road. Let’s think the unthinkable. Your pride and joy is parked under that enormous 250 year old tree at Bronte Creek Provincial Park during British Car Day and a huge limb falls and destroys your car (don’t worry – now that I’ve put this into print it will never happen). It is at this point that your insurance company will go through your appraisal with a fine tooth comb. If they feel that it is not detailed enough or the value seems high you may have a fight on your hands to settle the claim. A reputable appraiser will stand behind their work 100% - a shady operator will not.
So how can you make sure you get a good appraisal done on your car? The first thing to do is talk to your fellow enthusiasts. Who have they used? Have they had good experiences or bad? If an appraiser did a good job for someone you know chances are your appraisal will be good, too. If you have no referred appraiser or you would like a second level of security I recommend hiring an appraiser who is licensed by the Professional Association of Vehicle Evaluators (I am a member myself). As stated, there is no government regulation of antique vehicle appraisers. The P.A.V.E. organization is a Self Regulatory Organization which was formed to fill this void. P.A.V.E. members voluntarily join and bind themselves to a code of ethics when performing all of their appraisals. We are also subject to an annual peer review to ensure we are living up to that code. Membership is not automatic as our work is reviewed before being allowed to join.
So what should you look for in the appraisal itself? Simply put thoroughness and detail. Remember, if there is a claim, your car may be completely destroyed (or missing if it is stolen) and the appraisal will be the only true, independent record of its condition. The written portion of the appraisal should be a comprehensive snapshot of the cars condition at the time of inspection. It should detail all parts of the car - body, interior, undercarriage, glass, wheels and tires, motor, etc. It should also accurately identify the car via the serial, body and engine numbers. Pictures should form part of the report and show as much of the vehicle as possible. My own reports usually end up being between 8 and 10 pages with a 50/50 split between pictures and text.
So what about the value? I cannot stress enough that it is in everyone’s best interest, both you and the insurance company, that the value placed on the vehicle is accurate. Remember what I mentioned before – an appraisal with what appears to be an inflated value may be challenged by the insurer. How many times have you seen this in a classified ad – “appraised at $15,000, asking $9,000”? Unless the seller is having a fire sale, that appraisal is grossly overvalued. The appraised value of the car should represent the true comparable replacement cost of the car plus applicable taxes. Since most British cars are restored to original with few modifications, and are quite plentiful, this value is fairly straightforward to determine. I use a combination of book values, auction results and “advertised asking price” trends to determine the final value of the car. Keep in mind that I weight these values differently – just because someone is advertising a car at a certain price does not mean it’s worth that much. I usually use 10 to 12 different sources for values and most likely I will end up with 10 to 12 different dollar amounts. It is my job to analyze these numbers and come up with a single dollar value for your car.
So what about insurance coverage? That is what it is all about in the end. I strongly recommend that you get antique specific insurance for your vehicle. There are a couple of providers that advertise right here in Ragtop. While your standard insurance company may be willing to insure your Triumph – you may not be getting the coverage you think you are. With antique insurance you are signing on to something called “Agreed Value Coverage”. The endorsement or Ontario Policy Change Form (OPCF) is number 19A. The amount of coverage is based on the appraised value and in the event of a claim that will be the amount you get. A non-antique specific insurance policy will have you sign an endorsement number (OPCF) 19. Notice the lack of the letter A – very important! This endorsement sets a LIMIT to the coverage you get based on the appraised value of the car. The insurer can settle the claim for whatever they feel the car is worth up to that limit even though the appraisal puts a clear value on the car. So if you have been paying premiums to insure your car at value X – the insurer can still settle for ˝ of value X at their own discretion. If you are not sure which coverage you have call your broker and ask!
I hope this article has been of value to you. If you have any other questions I can be reached through my website www.vintagecarconnection.com or at 416-319-3321. More information is also available at the P.A.V.E. website www.trustpave.com.
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