Four Steps to Manage Risk at the Restoration Shop

possible that the restorers have kept it low to keep rates down. (This can provide clues about how they run other parts of their operation as well.) Bringing in your collectible car to be restored is exciting—a moment filled with dreamy anticipation. Whether you are building out a restomod or reassembling a classic, you will doubtlessly be imagining how your new car will look and feel once the work is completed. As collectible car risk management experts, hearing progress reports of these transformations is one of the happiest parts of our work. One of the least happy parts is learning about the painful issues that can, and often do, arise. Unfortunately, over the years, we have had to file many claims for damage caused or while at restoration shops. A mechanic’s test drive results in an accident. A car is stolen off the lot. The shop is destroyed by a fire. Worse, these cases often devolve into unproductive finger pointing, as it is not always clear who is responsible for covering a loss. To that end, we recommend a few steps to minimize both the emotional stress and financial loss, thus ensuring that your restoration experience is only a positive one.

1. Choose wisely. As you would with any service provider, you need to make sure you are engaging a reputable business. This is even more crucial if it is the first time you are considering a particular shop or your project is especially complicated. Here are some ways to do that: •

Check with the Better Business Bureau to see if any formal complaints have been lodged against the facility.

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Seek out references from other customers and ask about both the quality of work and its timeliness. As with home renovations, this work can easily drag on, so better to know if promised five-month deliveries often stretch to eight months or more.

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Take advantage, too, of the many online resources and gathering spots, especially for specific types of cars (for instance, Impalination or the Viper Forum). Search for previous relevant posts or ask if anyone has an experience with the shop to share.

2. Understand what the shop’s own insurance covers. While your vehicle is being worked on, the most serious risk is that the shop will not have the insurance to cover a loss. However, determining that is not always a straightforward proposition. It will not matter, for example, that the restorers have a $1 million policy if they regularly keep more than $1 million worth of vehicles in their garage. By doing the following, though, you can get closer to the truth: •

Request a copy of their certificate of insurance to ascertain the type and amount of coverage. Specifically, look at the liability limits on their garage keeper’s policy—the insurance that covers other people’s equipment and cars in the case of negligence. It is

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Find out how many cars the garage usually works on at once to determine whether the coverage amount is likely to be sufficient to cover yours. Note that this calculation will depend on your car’s own value as well.

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Ask if the garage expects to move your car out of the shop for any of the contracted services, such as painting. If it does, check their insurance to see if it covers this contingency.

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Call us to discuss your findings. We will help assess whether there is sufficient coverage on their end and ensure that your personal coverage is in good standing. The goal is that should a loss occur, your own carrier will be able to help settle the claim before trying to recoup the money from the shop, if it is responsible.

3. Update your insurance as the work progresses. Consider this scenario: The car you have insured for $10,000—it’s purchase value—is nearly restored after a major investment on your part, raising its worth to upwards of $60,000. But just as the crew is about to put in the seats, a flood occurs, damaging your vehicle. If you have failed to update its value with your carrier, all that money you just spent at the shop will be lost. Value increases do not add significantly to premium payments, so it is well worth adjusting the agreed-upon value on your policy as you invest in a restoration. Save updated bill sheets you have received from the shop so we can provide documentation when we ask to increase the policy’s value.

4. When there is a problem, contact us immediately. In the end, time is of the essence when filing a claim and it is as much an art form as it is science, so you want your insurance advisors on the case as soon as an issue arises. Inform us of the claim scenario as soon as possible so we can advise you about how best to proceed. We will also be able to say whether we believe the shop’s insurance or your own will need to cover the damage. Obviously, in general, we will fight for the shop’s insurance to cover the claim. But if you wait six months to let us know about an issue, we lose our chance to get ahead of the problem, which means we may not be able to properly position it with the carrier.

We recognize the effort it takes to be a good steward of these prized machines, and we want to make it as easy as possible to navigate the restoration part of this journey. Of course, we hope to only celebrate the beauty of your revamped car with you, but know that we will be here to help you manage the situation should things go wrong too.

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