What Makes Luxury Car Insurance Different from Regular Car Insurance

Posted on November 17, 2020 | by Alex | Posted in Insurance

Luxury cars are often associated with the utmost comfort, performance, and drivability. If not these, then they certainly score high on the style factor. For some, owning a luxury car is a dream fulfilled while for others, it’s a perk of being born with a silver spoon. Either way, a luxury car is a status symbol. These cars are costly, and even the slightest of damage can lead to massive repair costs.

This is where having the best luxury car insurance comes in. As the name suggests, luxury car insurance offers adequate coverage for high-performance vehicles that regular car insurance cannot provide. Being aware of your car’s insurance needs is a must to ensure it’s protected from unforeseen damages or incidents. Read on to find out what makes luxury car insurance different from regular car insurance.

Why is luxury car insurance important?

There’s a reason why luxury cars are called ‘luxurious’. Because they are made of inherently expensive parts, the repairs can be expensive as well. An insurance policy for a luxury car usually has a higher premium and more add-ons than standard car insurance to cover for costly repairs and allow for greater coverage claim in the event of an accident/theft.

What are the insurance needs of a luxury car?

Luxury cars have a higher value than most other cars, which means they’re going to cost more to insure. However, these vehicles have additional insurance needs that are unique to cars of their category. First and foremost is the engine. If you have a luxury car with a powerful engine, your coverage needs are going to be higher. This is because sportier cars are likely to increase your risk of an accident.

Insurance rates for foreign luxury cars can also be higher since the replacement parts can be hard to come by in case your vehicle needs a covered repair. Theft coverage is also another thing worth considering as exotic cars are more likely to get stolen or vandalised than regular cars.

Many insurance carriers obtain theft rate statistics for each make and model of luxury car so they can base the insurance premium off of the numbers. The higher the risk of theft or vandalism, the higher the premium will be.

How a captive insurance company may not be a good fit

With all these unique insurance needs in mind, you may want to think twice before going with a captive insurance company (captives). Captives are set up by its owners mainly to insure against its own risks, allowing them to better manage risks and insurance allocations. That said, captives may not be the best fit for insuring your luxury vehicle.

In general, captive insurance agents tend to focus on getting the lowest price for their policyholders instead of ensuring luxury car owners with the coverage they truly need. Since they don’t deal with luxury vehicles very often, they may not have enough experience to meet the insurance needs of your exotic car.

As a result, this can create gaps in coverage which will come back to bite you in case your luxury car breaks down or gets into an accident. In addition to that, the insurance agent may find it difficult to answer any specific questions you may have regarding luxury car coverage since they specialise more on traditional cars.

Choosing a high-net-worth insurance company

Instead of rolling the dice with captive insurance, you may be better off choosing a high-net-worth insurance company (HNW). An HNW insurance company caters to policyholders with prestige cars, high-value homes, expensive jewellery collections, and the like.

Their specialised agents have sufficient experience and expertise when it comes to insuring luxury cars, giving you peace of mind knowing that you have adequate coverage for your vehicle. They will take into consideration not only based on your car’s make and model but your driving habits and other unique factors as well.

Should a situation arise where you need to file a claim, you can feel confident that the claim will be processed in a professional and timely manner. This is because the agents deal with exotic vehicles on a regular basis, which is something that cannot be said of your average insurance company. These are just some of the main benefits of working with a high-net-worth insurance company and it truly makes a difference when insuring your luxury car.

If you’re looking for the best luxury car insurance, your go-to option would be to work with a high-net-worth insurance company.