Insurance Problems

[Midwest Classic]

To all Cobra Owners,

I have considered posting something about Cobra Insurance for quite some time and after looking at the last loss report I think now is the time. I own an insurance agency, Midwest Classic Insurance, that specializes in collector cars including Cobras. During the past three months my loss reports do not look good when I review them. During the past three months we have paid out $122.391 in claims with our clients. Of this amount $116,262 was paid to Cobra owners, that is 95% of all losses in the past three months were Cobra related.

Why am I telling you this, because if Agencies like myself want to have the freedom to continue writing Cobras at a good price for clients then we need to collectively help clean up the claims problems. If your local clubs will pass on information to owners about being careful when driving these four wheel rockets it may help. If loss ratios do not get better on this line of business then I can see Agencies, just as Hagerty has encountered, not writing these in the future. I currently get a lot of referrals from Hagerty to write Cobra Insurance and I hope we can continue to do so.

I am sure I will hear a lot of negative comments like "that's what people buy insurance for" but what Companies have to show is a profit and when you can drop writing coverage on one particular vehicle, like a Cobra, in contrast to the 100's if not 1,000's of other car models out there not having claims, I think they might just do that.

In closing please let club members know they need to be safe when driving their vehicles to not only keep good insurance rates possible but to be there for there families and friends as well.

Thank you,

Robbin Terry
Midwest Classic Insurance
www.cobrareplicainsurance.com
robbin@midwestclassicins.com

[Roscoe]

Robbin,

You are right. Insurance is based on actuarials. It would be interesting to know the circumstances of the claims, age of owners, etc.

By the way, in Sicily, the actuarials will not only tell you how many men will die this year......they even have their names.

Roscoe

[Midwest Classic]

You know I will do that. I am going to start keeping track of a lot more information and pass it own to the site. Some people will find it interesting and helpful and some may not but it will be there to see.

Robbin

[STL Mark]

What is a typical claim for a Cobra? A paint scratch? Door ding? Rear end collision? Theft? And what is the typical/average claim amount? I'm asking because the amount that you are attributing to Cobras ($116K) seems odd. Reason being (from my limited understanding) if one of these very expensive vehicles is involved in a "crash" at say 55mph you may survive - but the car would probably be total loss. Bent frames, demolished fiberglass, or worse - bent alum. bodies. Taking a car from perfect condition to an "un-repairable" condition seems fairly easy to do. That said - how many Cobras account for the $116K? Is it 1? 2? or 4? 10? I'm really interested - and just asking honest questions.

[Midwest Classic]

Mark,

We have not tracked every claim in detail, but after reading the reply from Roscoe we are going to start. The claims in the $116 were four, although one was for only $2.00. Once claim was an not at fault accident for $18,250, one lost control on a curve $58,456, and the last went off the road avoiding a deer at 01:30 in the morning $39,544. The last one seemed a little strange to the adjuster after investigating it.

As far as a typical claim for a Cobra, our experience seems to be in the five figures minimum. When you insure a $50,000 car for $475.00+/- a year it takes a while to make up for five figure losses, if you ever do.

I agree with you about when you are going to have a claim, it is probably going to be a large one. I looked at our claims with other vehicles and the highest one was $1,914.

I am glad there has been some interest in this thread as I posted it for awareness more than anything.

Robbin

[Blas]

Just to level the playing field...
How about Corvette and Mustang owners....
Just an interesting comparison....

[STL Mark]

Thanks Robbin.

I had always assumed (don't say it) that owners of exotic cars in general were more careful with their vehicles as a group verses other groups of car owners. And that owners of cars that were build by the driver from the ground up - we're even more careful. If I'm wrong - help me see the light. I'm sure we could all drive a little more carefully at times - but, as a group aren't Cobra owners fairly responsible?

Also - was that a 2 dollar claim in your reply? OMG!

[Roscoe]

After many years of reading threads here and on other Cobra forums I find many (not all) of the more serious accidents have occurred by people:

1) who are younger than most Cobra owners
2) have only had the car a short time
3) have no freekin idea of the power they control
4) have no skill in driving one of these 90" wheelbase cars
5) were out screwing around with the car

Did I miss anything?

And while most owners of these cars are skilled and responsible, it only takes a few rectums to screw up the industry.

Roscoe

[Midwest Classic]

Going to try and give you and idea of what we have had over the past three years with claims in excess of $10,000. This list is probably not as comprehensive as it could be. We could probably spend a couple of hours doing research but pulling quick information this is what we found. We had approximately 11 claims. Seven of the claims were Cobras with a total paid out of about $262,000, two Mustangs at $27,000, a Dodge at $47,000 and one Street Rod at $22,400. Keep in mind guys we are looking at Cobras versus every other car in production. We have two of the Cobra claims that state a deer ran out in front of them and that is why they ran off the road. At 1:30 in the morning I probably would question that a little. If deer are problems where you live I would be off the road at night as they caused about $70,000 of the damage. The plus side of these large claims was nobody was killed.

I agree with Mark about thinking the Exotic drivers were more careful but I, personally, look at the Cobras as more of the Street Rods. I consider the Exotics more of the Ferrari and Lamborghini type vehicles, hope I don't insult anyone. What I am seeing and hearing from talking with people is they are purchasing the Cobra as something they have wanted for a long time and with as big as motor as they can for the speed of the car.

I really don't want to sound like I am putting Cobra owners on the "time out" stool, just want to make sure you think about driving situations and conditions. I personally do not have a Cobra but I ride a '03 Honda VTX1800. I will not ride this on the road at night due to deer and respect the power it has, almost in a overly cautious way. Yep I had to see the speedo would hit 100 one time and that is over. I look at things with my bike as yeah it's fast and I don't need to prove it. Same way with the Cobras, we all know they are fast and there is no reason killing yourself proving it.

Robbin

[Midwest Classic]

Roscoe you are about right on the money. Although the owners of the vehicles which losses I mentioned might surprise you some. They were 34, 43, 45, 54, 61, 62, and 65. Three of the owners had their vehicle for over 18mos (one 5 years), the others were less than a year.

I try to "educate" them when I talk with them by letting them know of power and previous claims history we have experienced with these fun little cars.

Experience is the key and until they get that we will probably continue to have problems, unless I can weed out those rectums.

[pmfranke]

state farm sent me a bill for $543.00 for six months up from $367.00 .I have had no tickets or accidents.somebody is making some cash here. I think the deer avoider will be having a hard time paying for his insurance in the future.

[Cobrabill]

Robbin,thanks for putting this up.It's been coming for some time.I see posts from time to time on CC that indicate to me that the poster(s)has/have no business owning a 90 inch wheelbase car with 500 HP(they all have 500 HP-don't they?)This is a majority of the problem(refer to Roscoes list).Someone from another walk of life meaning-a non gearhead who decides a Cobra is a cool thing to have in his garage.He plunks down the money and PRESTO!-he's on his way to becoming a statistic.

A while back,there was a gentleman who picked-up his SPF during the week and the following weekend was "giving rides" at a family get-together.As you might guess,it got away from him and he went up-side down,rolled it and went off road.Last i heard,he plans on buying another one.And BTW-the guy is SEVENTY-THREE years old.This scenario is one of Robbins statistics waiting to be posted.The solution is obvious,but it ain't PC. Did i just type that?

[WarrenG]

Maybe the insurance companies should begin requiring that owners of high performance cars complete a high performance driving training class, i.e. Skip Barber, Bondurant, etc. With aircraft everytime you move up in the performance or complex operations scale the insurance companies require proof of training/competancy.

[madmaxx]

I feel past experience/driving history is relevant. If individual have a number of speeding tickes or wrecks do not write them a policy.

[Midwest Classic]

We have pretty strict underwriting guidelines now 1 ticket or 1 accident in the past three years but with Cobras I might start looking at 0 tickets/accidents. The only thing I have to check with that is if the State Department of Insurance will allow me to go against what the Company is filed to write in the State. You know what happens, I get sued for discriminating against Cobra owners.

Any other ideas on how to help keep the future of decent insurance rates, please lay them on me.

[WarrenG]

At the SB driving classes they teach their students to control their cars on skid pads and small autocross courses where the speeds are below most legal highway speeds in both dry and wet conditions. Car control is paramount. You actually lose points if you have to resort to recovery. The high performance driving classes do end up eventually on the "big" track but I believe it is a small portion of the class.

Their racing classes take place on the actual track and do end up as fairly high speed events, however again even in these classes car control is emphasized and they begin on the autocross course where the top speed is probably 35-45 mph. They also make the drivers financially responsible for any damage they cause now.

I can see where a racing cert might actually scare away an insurance company but I would think that a driving/car control class might be a plus.

[Cobrabill]

Originally Posted by madmaxx

I feel past experience/driving history is relevant. If individual have a number of speeding tickes or wrecks do not write them a policy.

What does speeding have to do with driving ability?If you have a crap load of speeding tickets and NO ACCIDENTS,that means you are a GOOD driver deserving lower rates.

[Midwest Classic]

PMFRanke at $1086 a year that is quite expensive through State Farm. I know if you asks others on this site you would find SF is not charging them that much. For me to get to $1086 on a Cobra we would have to insure it for around $100,000.

[TXBLU]

Interesting. It occurs to me that Insurance companies are in business to make money, just like any other company. As far as I can tell, insurance companies have been making an overall profit for quite some time. I would even imagine that their margins have been consistantly increasing as well. When did you last hear of an insurance company that went out of business because it wasn't making money?

And yet, whenever a single segment has the slightest upward trend change in payouts, alarms and whistles go off in all the land to signal the impending insurance premium increase/coverage denial apocolypse for that segment, irrespective of the percentage of business that segment commands, or whether or not the carrier is actually losing money in that segment. Insurance companies have gotten so good as getting the public to believe the "poor me" stories the insurance companies tell whenever their profits aren't quite as spectacular as they would like, the public tends to just shrug it's shoulders at the increases in premiums and coverage restrictions imposed on them, sometimes seemingly arbitrarily.

If the insurance companies would provide detailed information about their losses versus profits overall, plus within the specific segment where they want to increase premiums, the public might be more sympathetic to their situation. I have never seen an insurance company provide that kind of information. They tend to only provide the statistics they need to justify increases. What I am saying is, I believe insurance companies use selective statistics, not complete data, to justify the increases.

While it may be true within a certain context that they are "losing money" in a particular segment, the insurance industry, just like the airlines and other industries, tell the public it is losing money when in reality it just isn't making as much as it planned to, hoped to, or told it's board of directors it was going to make. It happens all the time. Companies quote statistics to "prove" their points, when the truth is, they simply are committing lies of omission by not stating all the true facts and figures.

Beware the insurance company that wants to raise your rates. It may not be giving you all of the information it has. If it is justified, so be it. With the way things are now, we will never really know.

All that being said, I see no reason why an insurance carrier would NOT insist that drivers of very high performance automobiles attend driving schools that teach the art of high performance driving. I have attended racing schools five different times, and I have gotten faster on the race track, and safer on the street, every time. They insist on recurrent flight training for aircraft pilots, why not driver training for sprts car "pilots"? I think we would all feel safer if we knew that the guy in the Porsche or Ferrari (or Cobra) in the next lane actually knew what he was doing...

[Midwest Classic]

WarrenG,

You know when I posted this I was hoping to get some ideas on what to do if I got a phone call from the Company some time and they said they wanted to quit insuring these.

I like the class concept but the only problem, and correct me if I am wrong, we are teaching the owner how to drive fast and handle the car. Two of the claims that were accidents were because the guy was driving too fast and lost control. When you teach someone to drive fast it is in a controlled enviroment with usually a good road, not the typical road we drive on with loose gravel and pot holes.

I just wonder if we are just givng them that feeling of confidence to try and push it to the limit.