In 2020, BMW alone sold approximately 280,000 vehicles to the Americans. If you own a luxury vehicle, you may be looking for auto insurance that can protect your finances in the event of an accident. Drivers pay more for luxury vehicle insurance because it is designed to insure high-quality, high-performance vehicles that are more expensive to repair or replace.
The insurance premium for your luxury car will depend on the vehicle you drive. For example, Cadillac Escalade drivers pay an average of $ 2,188 per year for full coverage, and BMW 330i drivers pay $ 2,225. In contrast, the average cost of full coverage auto insurance in the United States is $ 1,674 per year.
What is luxury car insurance?
A luxury car is a car that offers higher levels of equipment, comfort, quality or performance than an ordinary vehicle. Exotic cars are a type of luxury car focused on speed and performance. An example of a luxury car is a Jaguar Type F with a base price of $ 61,600 while an example of an exotic car is the Ferrari 812-Superfast with a manufacturer’s suggested retail price of $ 335,000.
If you insure a luxury car, expect to pay more for insurance than for a standard car. Since luxury cars are generally more expensive than standard vehicles, insurance costs are also higher. If your luxury car is damaged, the costs for spare parts, repairs, and labor could be significantly higher than for low-end vehicles. While you can get insurance from a standard insurance company, depending on the type of vehicle you own, you may need to apply for coverage from a company dedicated to premium vehicle insurance.
Luxury Auto Insurance Coverages
If you own a luxury car, you should have at least the minimum insurance coverage limits required in your state, just like insuring a standard vehicle. You may want to consider the following auto insurance coverages for your luxury car:
- Liability coverage: Since luxury cars are more expensive than standard vehicles, you may have more assets to protect. Having higher liability limits can protect you more financially in the event of a at-fault accident.
- Medical payment coverage: This coverage pays the medical bills for you and your passengers if you are injured in an accident, no matter who is at fault. If you live in a no-fault state, you may need to purchase personal injury protection coverage instead of medical expense coverage.
- Collision coverage: If you’re in an accident and your luxury car is damaged, collision coverage can cover damage to your car after you’ve paid your deductible. It is also the coverage that could pay off the value of your vehicle if it is totaled.
- Full coverage: This coverage covers claims for vehicle glass breakage, theft, vandalism, weather damage and damage caused by impact with an animal. It is sometimes referred to as “non-collision coverage”.
- Gap insurance: If you are financing or leasing your luxury car, you may want to consider gap insurance. This pays the difference between the actual cash value of the vehicle and the loan amount.
You can also check with your insurance agent to see if your business could use aftermarket parts for repairs. If this is the case, some auto insurance companies offer original parts coverage, sometimes referred to as “OEM coverage,” at an additional cost. This coverage means that the aftermarket parts used on your luxury vehicle are original manufacturer parts rather than aftermarket parts.
Exotic Car Insurance Coverages
Exotic vehicles are luxury cars focused on speed and performance. If you own an exotic car, just like owning a luxury car, you should at least maintain your state’s minimum liability limits. Since exotic cars often have high horsepower and speed capabilities, you may need to seek specialist auto insurance or collectible auto insurance for a better selection of specific coverages, such as:
- Agreed value coverage: With this coverage, you and the insurance company agree on the value of your vehicle. If your vehicle is damaged, your insurer will pay up to the agreed value.
- Automobilia coverage: If you own an exotic car, you can also own valuable collectibles from the manufacturer. Some specialty auto manufacturers provide coverage for your license plates, documentation, hood ornaments, signs, displays, and other motor vehicles.
- Tool coverage: If you have personal tools used to maintain your exotic car, you may want to cover them as part of your auto insurance policy. If your business offers it, this option covers accessories, storage cabinets, toolboxes, and tools. Normally, these items are covered by your home insurance with a separate and often higher deductible than what may be on your auto insurance policy.
Exotic car owners may also consider comprehensive collision, medical or personal injury protection, OEM coverage, and gap insurance. Just like luxury car owners, you may also want to consider higher liability limits to better protect your assets in the event of a at-fault accident.
How to save on luxury and exotic car insurance
Insuring luxury and exotic cars can cost a lot more than insuring a basic vehicle for several reasons. First, flagship luxury sedans cost almost $ 100,000, on average. If your luxury vehicle is damaged or totaled, your insurer will have to pay a large sum to repair or replace it. Second, your risk profile affects your insurance rates. Since luxury and exotic vehicles are known for their speed, an insurance company might perceive their owners as more prone to risky driving.
Although luxury and exotic cars cost more to insure than standard cars, there are still ways to save money.
Benefit from discounts
Most insurance companies offer discounts that can help you control your auto insurance premiums. Anti-theft measures such as engraving the VIN on your windows, having a car alarm, or storing your vehicle in a locked garage could qualify you for a discount. Safety features like anti-lock brakes, airbags, daytime running lights and electronic stability control could also lower your premium. By taking advantage of as many discounts as possible, you could reduce the cost of your auto insurance.
Store your vehicle out of season
If your car stays in a garage and isn’t driven for a while, you may be able to save money by removing some coverages. You will need to check with your insurance provider to confirm that you still meet your state’s insurance requirements. If you have a loan or lease, you can also check with your financial institution to make sure you have the protection they need.
Frequently Asked Questions
What is the best luxury car insurance company?
The best auto insurance company for luxury cars will depend on your specific needs. The company that’s right for you will have the coverages, discounts, and features you’re looking for. Getting quotes from multiple companies and comparing them can help you determine the right company for your needs.
How much does insurance cost for an additional luxury car?
Insurance companies use several factors to determine premiums, including the value of the luxury car, the types of coverage and limits you choose, your age, and your driving record. However, since they tend to be more expensive than standard vehicles, you should expect to pay more for insurance when insuring a luxury or exotic car.
How do I get the cheapest rates for luxury and exotic car insurance?
Although auto insurance for luxury and exotic cars is more expensive than insurance for standard cars, there are ways to save money. You may be able to save money on your auto insurance premiums by shopping and comparing quotes, keeping a clean driving record, and taking advantage of discounts.
Will a speeding ticket affect my luxury car insurance premium?
Insurers generally see a speeding ticket as an indication that you are a high risk driver. As a result, you will likely have to pay a higher insurance premium. On average, drivers’ car insurance premium increases by 23% after speeding.
What insurance do I need for my luxury vehicle?
The amount of auto insurance you need will depend on your individual needs. Each state has minimum liability requirements. However, insurance experts generally recommend purchasing more insurance to ensure that you are financially and legally protected in the event of a collision. You may want to discuss your coverage needs with a local insurance agent to determine the amount of coverage that is right for you.