By JOHN WILEN
The Intelligencer

Ken Fertig hit a pothole Saturday morning while driving his 1965 Chevy Impala, bending a custom rim.

Counting damage to the rim, the custom tire and the Impala's suspension, Fertig expects his repair bill to hit $600.

He won't pay a cent, though. Fertig buys insurance from Grundy Worldwide, a Horsham company that insures "collector" cars for rates much lower than traditional insurance.

Fertig pays about $230 a year to insure his Impala for an "agreed value" of $30,000. He's eligible for Grundy insurance because he drives the car only for pleasure and keeps it in a garage.

Fertig doesn't worry about submitting claims: His policy carries no deductible, and Grundy doesn't raise rates or drop coverage of people who file claims, he says. Indeed, Fertig has submitted several claims over the years for different collector cars he's owned.

"Grundy has the best coverage," Fertig says. "If you have a problem, they come out and (take care of it)."

As it turns out, there is a growing industry of companies that specialize in insuring collector cars, and several of those companies are located in the Philadelphia area.

"It's getting bigger and bigger," Steve Moskowitz, executive director of the Hershey-based Antique Automobile Club of America, said of the collector-car industry. "These insurance companies understand our vehicles."

Collector-car insurance companies in the area include Grundy, American Hobbyist Insurance, of Jenkintown, J.C. Taylor, of Upper Darby, and American Collectors Insurance, of Cherry Hill.

In part, that concentration is due to the industry following its market.

"The Northeast has been a huge hotbed for the collector market," Moskowitz said. "The bulk of our members are here in the Northeast."

But Grundy CEO Jim Grundy sees it a little differently.

"It turns out ... our competitors started out as the evolutionary process of my father's discontinued relationships," Grundy laughs.

Founding father

Grundy's father started out in the insurance business in 1947, and within a year wanted to insure his father-in-law's classic-car collection.

His father-in-law, Jim Grundy's grandfather, said sure, but only if it was a simple policy that reflected the car's true value. Grundy's father basically invented collector-car insurance on the spot. He talked larger insurance companies into backing his plan to insure collectible and antique cars at as much as a quarter of the rates of normal car insurance.

The company is backed by a different insurance giant now, Chubb, than it was when

Grundy's father first got his start. Grundy's dad left those early backers, Zurich Insurance and St. Paul Insurance, along the road for various reasons. They, in turn, found new partners, many of which evolved into Grundy's competitors, Grundy says.

The fundamentals of the business haven't changed much over the years, he says.

"There is almost no difference between what my father did then and what we do now," Grundy says.

Well, there is one big difference: At the height of the business under Grundy's father, in the late 1950s and early 1960s, Grundy had extended a total of about 2,000 policies. These days, the company writes about 2,000 policies a month.

The change came when Jim Grundy took over 25 years ago. He realized he had to broach what was then a stigma against advertising by insurance companies if he wanted to grow.

"We realized we either had to get into the business or get out of the business," Grundy said.

Grundy grew from two employees under Jim Grundy's father to 65 and growing today.

"We take on more as fast as we can get them," Grundy said.


Grundy declined to disclose the private company's revenues, but said it is growing at a rate of 25 percent to 30 percent a year. It has 2,000 independent brokers selling its insurance nationwide.

Down Route 611, American Hobbyist recently moved its headquarters to Jenkintown from Florida. The company is only seven years old, but was founded by former employees of another collector car insurance company, said Laura Bergan, director of marketing.

Bergan declined to identify the owners, number of employees or revenues.

State records show American Hobbyist's president is Thomas Kanyuk.

A simple plan

Collector-car insurance is based on the simple premise that the people who buy it take very good care of their cars and don't use them for primary transportation.

To qualify, a car has to be a "bona fide collectors vehicle," Bergan said.

That means it has to be a vehicle that will appreciate in value over time, as opposed to most cars, which depreciate in value. New exotic cars, such as Bentleys, certain types of Mercedes or other limited-edition high-end cars designed to be collectibles, such as the Ford GT, qualify.

Another criterion: The car cannot be its owner's primary transportation.

"The cars we insure, on Monday through Friday... are sitting in the garage," Grundy says.

There are no mileage restrictions - collector-car insurance companies realize car owners are going to drive to car shows or for pleasure. And the companies rarely catch customers cheating.

"We rely wholeheartedly on the honor system," says Nicole Marketta, claims manager and underwriter at Grundy.

Cars are insured at agreed value - essentially, what an owner says the car is worth, within reason. All collector car insurance companies employ experts who can spot an unreasonable value.

That's an extremely important point to collectors: "They give you the complete value if your car is totaled," Fertig says.

Knowledge of collector cars is one big reason to buy insurance from a collector-car insurance company, Moskowitz says.

"You don't get a normal State Farm adjuster who's going to look at a ཙ Packard and know what it's worth or where to go to get it fixed," Moskowitz says.

Another big reason: Price. Grundy, for instance, covers an $80,000 1932 Ford Roadster for a year for $473, with no deductible.

"If you go out to Nationwide or some of the others," says Fertig, "you're fooling yourself."

Lots of upside

Hard figures on the size of the collector-car insurance industry are hard to come by. Grundy estimates the industry generates revenues of $250 million a year at the moment, but has a $1.5 billion potential.

Because of the niche nature of the industry, and the fact that the cars it insures are very well taken care of, it is lucrative.

"This particular line of insurance is seen to be very profitable," Bergan says.

Every year, more affluent boomers retire.

"I think that the boomer generation is definitely what's driving (it)," Bergan says. "People want to invest in something that's tangible."

And every year, cars get older.

"The number of eligible cars goes up significantly every year," Grundy says.

Long term, Grundy sees nothing but upside: "All those of us who are specializing in this industry, combined, have only tapped into about 20 percent of the market. I think there's plenty to go around."

John Wilen can be reached at (215) 957-8167 or jwilen@phillyBurbs.com.