Things to consider when insuring high-performance vehicles and when to look at exotic coverage
High performance car insurance operates much the same way as car insurance for any other car. But it’s not cheap.
That’s why shopping around is even more important. It may even land you a good deal.
How High Performance Car Insurance Works
You need to understand the basics of insurance underwriting before seeing how high performance car insurance works. Basically, insurance underwriters rate risks based on cars, drivers, and hundreds of other factors. If the company decides to take on your risk, they assign a premium to the new customer – and you get a policy.
Since the type of car is a factor for underwriting, some automobiles cost more to insure than others. Rates differ from company to company, but high-performance sports cars like Vipers, Camaros, and Mustangs rank among the most expensive to insure. From an underwriter’s perspective, there’s more risk involved.
But it’s not just about the car you drive.
Other factors, such as safety record, play a large role as well. If you haven’t already purchased your high performance car, it may be a good idea to research insurance rates before buying. The differences can be quite significant between models and companies for reasons that may not be readily obvious.
Coverage for Your High Performance Car
Theoretically high performance car insurance can be purchased legally at state minimum liability limits. However for a variety of reasons that’s probably not a good idea.
For one, minimum liability limits are often insufficient for even lower-cost models. Repairs and other associated costs for larger-than-fender-bender accidents can easily exceed minimum limits if you’re at fault. When dealing with high performance vehicles, the problem will probably be larger because it’s a more conspicuous car.
In addition, high performance cars represent an investment. As such, good material coverage is often recommended even after the bank is paid off. You wouldn’t want to treat your sports car in the same way as you would an old beater. After all, it may become a bona fide classic in a few years.
Exotic Coverage for Your High Performance Car
A standard full coverage policy may be sufficient for a domestic high performance vehicle. But it doesn’t work that way for all sports cars.
If you own a six-figure vehicle like a Ferrari, Lamborghini, or Masarati, you should consider exotic car insurance. Standard companies that would insure other high performance models may need to refer you to a special insurance broker.
As a general rule, when the car becomes more like an investment than a means of transportation, special insurance considerations should be addressed.