Displaying and loaning collector cars

More Risk Than Meets the Eye 

For many car collectors, much of their enjoyment comes from seeing a car’s styling and hearing the sound of its engine. And what better way to amplify that enjoyment by sharing those with fellow enthusiasts? Collectors have numerous opportunities for others to appreciate their cars, from automobile shows to road rallies, to charity events, to museum exhibits. Wherever a car is displayed, there are risks – both to the automobiles and collectors’ financial assets.

Car collectors should be aware of the risks and exposures in different settings. These include:

Public displays. Postponed due to the pandemic, many public events and auto competitions expect to resume eventually. These events give auto owners and enthusiasts a chance to see automotive history up close and appreciate new as well as restored vehicles. These range from on-the-street cruise-ins of hot rods and antique cars, to holiday parades, to exclusive gatherings of some of the world’s most valuable vintage cars.

One of the most famous venues for antique and rare cars, such as a 1931 Bentley 8-litre tourer, is the annual Pebble Beach Concours d’Elegance, in which selected participants park their autos on the 18^th fairway of the Pebble Beach Golf Links in California. Scheduled for August 15, the 2021 edition will be the 70^th Concours.

Caffeine & Octane is a monthly outdoor gathering of all makes and models in Sandy Springs, Georgia, just north of Atlanta. Considered one of the largest such events in North America, Caffeine & Octane expects to resume its Sunday morning shows in summer 2021. It’s held rain or shine, and canceled only for severe weather such as lightning or tornadoes.

Risk considerations in any public display include:

• Getting the car there. Driving a vintage car on public roads involves the possibility of a crash or another vehicle colliding into it. Transporting a car on a trailer or flatbed truck is another option. In either case, owners should ensure they – and whoever they hire to transport their prized vehicle – are adequately insured for property damage and liability.
  
  
• Location characteristics. Where will the car be parked? On a street with traffic whizzing by, in a building, or in a grassy field away from structures? Outdoor displays mean cars are directly exposed to adverse weather conditions, while indoor exhibits may involve metal buildings that provide cover from rain and hail, but little resistance to storm-force winds.
  
  
• Crowd proximity. How close will audiences get to the collectible auto? Are vehicles roped off, to be appreciated at a distance, or will crowds be close enough to touch them? An inadvertent accident by a careless viewer could damage a vintage car and reduce its value, or a cunning thief might attempt to drive one off.
  
  
• Driving during the event. Some events, including the Pebble Beach Concours, encourage owners to drive their cars in organized tours. Even at slower speeds, a crash or equipment breakdown could occur, causing injury or damage.

• Loans and gifts. Another way for car collectors to let others appreciate their vehicles, usually in more protected settings, is through loans or donations to museums.

For example, the Gilmore Car Museum in Hickory Corners, Michigan, is the largest auto museum in North America, with more than 400 cars on display in 190,000 square feet of exhibit space. The museum operates as a non-profit organization and does not purchase cars for its collections but accepts donated automobiles and those offered on loan, typically for one year.

Under terms of the museum’s loan agreement, a vehicle’s owner must provide proof of insurance as well as agree to hold harmless and indemnify the museum for any loss or damage while the vehicle is on loan.

Donating vehicles to Gilmore or another museum requires verification of a clear title and a transfer of ownership^[1]. For tax and insurance purposes, it is usually the owner’s responsibility to have the vehicle appraised. Insurance coverage for donated autos should be carefully coordinated with the transfer of ownership, so no gaps occur during transportation.

To better understand the risks involved in displaying, loaning, or gifting collectible cars, owners should consult an experienced personal risk advisor. Marsh McLennan Agency Private Client Services works with leading insurance carriers that provide flexible coverage for collectible cars. The right risk management can give car collectors peace of mind, and let others share their automotive passion.