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Like a piece of art

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On May 5, a 1955 Mercedes-Benz 300 SLR Uhlenhaut Coupe sold for $ 142 million during an auction at the Mercedes-Benz Museum in Stuttgart, Germany. It was the highest price ever paid for a car at auction, far surpassing eight-digit Ferrari sales, which far outstripped top-tier billing.

The identity remains a mystery of the person who bought a stunning silver, one of the two, with doors with seagull wings and shiny exhaust pipes coming out of the right. Despite persistent rumors in the industry, representatives of Ernesto Bertarelli, a Swiss-Italian billionaire, have firmly denied Bloomberg that the longtime Mercedes-Benz connoisseur made the lucky offer.

“The buyer is primarily an enthusiast, not an investor,” says Simon Kidston, who placed the winning bid on behalf of a customer he refuses to identify. “It simply came to our notice then love car. The buyer never asked me how much I thought the car might be worth in the future. “

What is certain is that an object of such value will require a solid insurance policy if the new owner plans to drive it. Technically, if the car is never driven, it will not require legal insurance, according to analysts at Hagerty, a company that offers insurance for collectible vehicles and collections that are valued at up to $ 1 billion.

“There are parts of the world where people will not insure high-value vehicles,” said Jack Butcher, Hagerty’s president of global markets. “They want to keep them away from books.”

Like a piece of fine art

A Mercedes-Benz spokesman said the company would not comment on the insured coupe that set the record. But according to Abe Barnett, vice president of Signature Services, Hagerty’s state-of-the-art insurance segment, the most obvious bet for the new owner would be to protect him with an inland maritime insurance policy, which covers high-value items. usually excluded from adequate coverage. .

There are many factors involved in finalizing the rates and structure of such a policy - things like location, storage and vehicle type - but in general, insuring a $ 100 million vehicle costs well over $ 100,000 for insurance per year.

“That would essentially treat her like a piece of jewelry or an art,” says Barnett. “It offers a much broader form of coverage, as opposed to a standard car policy, which would be comprehensive coverage even in the event of a collision. When they take their vehicle around, whether they want to take it to a competition or to take it on a road rally or a tour, that policy will cover it properly. ”

Art galleries and fairs often use this form of cover to protect paintings, sculptures, prints, collections and cultural artifacts, and elite garages do so with cars. This includes protection against damage or loss caused by theft, accident or mishandling or in the event of an undetermined cause of property loss. It would also help cover the cost of repairing or replacing properties damaged by fire, wind, hail or water.

However, domestic maritime policies do not cover war, nuclear or other damage. They do not cover mechanical damage or problems that occur due to regular use, such as tire explosions, hose repairs or brake replacement. If you (or, more likely, your garage manager) should forget to change the oil in your million-dollar Mercedes, this is for you. The annual maintenance of these vehicles can cost tens of thousands of dollars in storage, fuel, parts and service.

“It’s common for insurers in general not to try to insure what they consider normal wear and tear,” says Butcher.

How much is it worth … to you?

The most important thing when subscribing to such a policy is to agree on the value for which the vehicle will be insured. This number can be much higher than what was paid for it; it can also be lifted as a car is restored. Kidston declined to discuss details of the value for which his client’s vehicle was insured.

Maintaining or restoring a single million-dollar vehicle can significantly increase its value, although this was not the case with the Uhlenhaut Coupé.

“Since the car has always been a gem of the Mercedes-Benz Museum, it has always been meticulously maintained in excellent condition,” says Haynes. “As far as we know, there was really nothing to do with the car before it was put up for sale.”

For vehicles in need of work, the insurance provider will often consult with owners with a high net worth on a quarterly basis to determine the progress of the project and to adjust the value of the insurance policy accordingly.

Keep safe

How and where the car will be stored will probably affect the price of the insurance policy more than anything else. “Many rich people live in beautiful areas that tend to be catastrophically exposed,” says Butcher, citing private islands, wooded mountains and steep cliffs.

Keeping a good vehicle away from fire and hurricane areas is vital. As well as storage in a temperature controlled environment with effective security cameras, burglar alarms and sprinkler systems that can spray fire retardant foam. Some collectors go so far as to preventively clean the brush within a radius of 200 feet around the place where they store the car and dig retention ponds to put out the flames when a fire closes - anything to protect the investment.

An additional consideration: “Insurers will want to know the age of the people who might be driving this,” says Kidston. “And if the car is transported, they will often ask for two drivers to be on the truck and not be left unattended for a while.” Transportation usually takes between $ 2,000 and $ 10,000 or more, depending on whether the vehicle is transported by a flatbed truck, a covered carrier, a boat, or a cargo plane.

Usually, a deductible does not apply to ultra-rare cars. If an owner insists on one, it could be 1% or 5% or 10% of the total insured value of the car, says Butcher. Having a deductible is a way to avoid having to apply for insurance for smaller incidents, such as scratches or cracked wheels.

“If someone feels comfortable absorbing the cost, they may want to fix it themselves,” says Barnett. He could say, “Well, that’s $ 50,000 or $ 100,000.” I feel comfortable paying out of pocket. ‘”

As with your daily car insurance policy, you do not need to file a claim to help keep your insurance premium as low as possible. “It’s not a crazy amount, but it reduces it enough,” says Barnett. (A single policy claim would probably not increase rates.) Ethically, anyone selling a vehicle should disclose even the smallest incidents that have occurred to them - whether or not the incident was reported to insurance. .

Resurrected from the ashes

Even if the inconceivable happens and the car is damaged in a catastrophic event, such as a plane crash or a flood, not everything will be lost - assuming it can be repaired.

“Of course, no one likes that in the history of a car, but at least the car is not a complete overhaul,” says Kidston. With extreme damage, the owner would discuss with the insurance company about the reduction of the value of the car, pending the restoration.

In rare cases, car values ​​have risen to higher altitudes after superficial damage. In 2019, in Durham, NC, a gas pipeline exploded in front of a warehouse where about half of the prestigious Ingram car collection is stored. An extremely rare 1961 Porsche 356 B Carrera GTL Abarth - so valuable that only an original set of tools is worth $ 10,000 - was one of many vehicles injured when the roof collapsed.

After an intensive 4,000-hour restoration of the little silver pilot by the family-owned outfit called Road Scholars, Abarth returned completely in just four months, winning his class at the Pebble Beach Concours d’Elegance. She then won top honors in her class at the 2022 Amelia Island Elegance Contest. In May, she won her class at the Villa D’Este Concours d’Elegance.

Call this a triple-crown return and then something - with the help of a powerful insurance policy.

Photo: A vintage Mercedes-Benz 300 SL Coupe W198 (1955) in the Mille Miglia classic car race on May 17, 2014 in Colle di Val d’Elsa, Tuscany, Italy. Photo credit: Bigstock

Copyright 2022 Bloomberg.

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Hi, By Profession I am an Injury Attorney who handles accident cases of cars with no insurance. I took College Classes online to get a degree in game design too.
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