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Classic cars, classic insurance problems in UAE

Absence of an official classic car valuation authority in the UAE causing problems

Image Credit: Courtesy: Dr Ahmad Moufti
The 1977 model Mercedes Benz that was wrecked when aspeeding sports utility vehicle crashed onto it in a parking bay.
03 Gulf News

Dubai: The case of a classic car owner, whose car was written off in an accident by an insurer, brings to light the grey area of classic car valuation in the UAE.

Sharjah resident Dr Ahmad Moufti approached Gulf News, claiming that his 1977 Mercedes Benz SLC was considered a write-off by an insurance company with the assigned garage estimating the car’s value at Dh5,000.

Dr Moufti said he disagrees with the estimate.

The value of the Mercedes Benz SLC was approximately Dh30,000 before the accident, according to him. His car was parked when it was hit by a speeding 4x4, overturning it on the sidewalk; the driver at fault had third party insurance.

Specific to Dr Moufti’s case, Gulf News requested the insurance company for a statement on its valuation process of classic cars. However, the company spokesperson wasn’t available for a comment.

To understand the insurance policies regarding classic cars, Gulf News spoke to a couple of motor insurance experts.

Mustafa Vazayil, managing director of Gargash Insurance Services, Dubai, said that there is recognition for classic cars. He explained that if a client can prove the value of his car through reputed valuation websites, he or she can select a motor insurance policy accordingly.

“Specialised brokers will tailor a policy for a classic car,” he said.

Pointing to the current insurance market, Vazayil said, “In this market, it is more common for insurers to consider depreciation rather than vintage value. The concern is also to do with lack of awareness on the classic owners’ part who may not know how to go about insuring a classic car.”

George Ashkar, managing director of Gateway International Assurance, Dubai, said that there are loss adjuster companies in the UAE that have classic car valuators.

The valuation is based on the car model; number of similar model cars manufactured, and how many of these are still available worldwide; state of interiors and exteriors; and mechanical parts. Once the value of a classic car is ascertained, a classic car owner can approach an insurer.

In terms of advice to classic car owners, Ashkar said, “It is best to select comprehensive insurance that would cover all types of damage.”

Speaking to Gulf News, Dr Moufti explained that the absence of an official classic car valuation authority in the UAE compelled him to fall back on online estimates.

“There are several recognised sites that list vintage cars with their estimated values. I used one of these US-based sites and approached United Insurance; it wasn’t considered,” he said.

He added, “It is unfortunate. I have spent thousands of dirhams towards maintenance. I was even going to register my car with the Sharjah Old Cars Club and Museum before the accident. I am saddened to know that insurance companies do not differentiate between an old car and a vintage one.”



Latest Comment

The news story recognises the problem but what's the solution? Even if you do get a valuation on the car, and get it fully insured, the problem I had with one of my newer but still rare cars that was fully insured,was that I had no choice in which garage did the repairs. If the parts were not in stock and I ordered them in myself, the insurance companywould not pay for them, saying they would only pay for parts from themain dealer. I highly doubt that the dealer has parts in stock for my 53year old car... so the question is... what exactly will they pay for?Unfortunately you're almost better off not having it fully the third party insurance so at least you're not liable if you hitsomething, but put the money you would be paying for fully comprehensiveinsurance rates aside in a rainy-day fund for yourself in case somethingbad happens. At least then you can choose exactly which garage does therepairs and with the parts that you choose. If one of the insurancecompanies wants to step up to the plate and look after classic carenthusiasts properly, and can assure me that the cars will be repairedat a credible garage, then I would happily get my collection insuredwith them, both vintage and the modern daily drivers. Insurancecompanies should recognise the classic car business case. You're talkingabout a car that will be much better cared for than the average car,driven carefully by someone who is paying much more attention than theaverage driver, and usually only driven on weekends when the weather isnice, so maybe once a week for 6 months of the year... so it's onlydriven maybe 24 days out of the 365 in the year... the risk factorcompared to the average car is much lower!


27 August 2012 19:30jump to comments