Post Corona, sales of exotic performance sports cars are starting to rebound. Brands like Ferrari, Bugatti, Lamborghini, Rolls Royce, McLaren, and Aston Martin are experiencing record sales. (1) Where traditional vehicles are easier to insure, high-end exotic performance sports cars carry a higher price tag as well as an increased risk that requires specialized insurance protection. If you’re passionate about driving and collecting exotic or collector vehicles (which includes modern collectible and exotics), it’s important to protect your investment with the proper levels of insurance. McSweeney & Ricci’s private client group partners with select premium insurers (Chubb, Pure, Cincinnati, Hanover Prestige, Berkley One, and Vault), to provide customized insurance solutions to accomplished individuals with more to protect.
What is Considered an Exotic Vehicle?
According to Trusted Choice, “exotic” refers to cars that are considered very elite vehicles, with price tags that could range from around $100,000 to a million dollars or more.” (2) Some exotic/performance vehicles are stored in a secure garage and driven occasionally, while others are used for the owner’s primary mode of transportation.
Insuring Exotic Cars vs Traditional Vehicles
There are several factors that make insuring an exotic vehicle more challenging than a typical vehicle, including their high value, cost to repair, usage, higher incidence of being stolen, and their performance.
- The Appreciation Factor- The value of traditional vehicles depreciates the moment they’re driven off the lot at the car dealership. In comparison, if kept in good condition, most exotic or performance sports cars are expected to appreciate over time. The cost of a high-end sports car is significant, and you’ll want to protect that investment with the proper levels of car insurance. To determine the amount of coverage needed for your exotic vehicle, our private client group partners with you to obtain an expert appraisal and decide on an agreed value. You’ll receive the agreed value in the event of a total loss. With protection from our premium insurers, there’s no depreciation or questioning the vehicle’s value when you have a claim.
- Repair Expense- Most exotic and sports cars are foreign-made and require special tools, specialized parts and skilled technicians to repair them. Not only are the vehicles themselves more expensive but the parts required to repair them are also more expensive. Some car insurance companies decline to offer coverage for performance, sports cars or exotics due to the added expense to repair forcing up the costs they must pay in claims. Our premium partners, specialize in providing coverage for high end vehicles. You’ll have your choice of repair shop, and your repairs will be made with original equipment manufacturer parts whenever possible. If OEM parts aren’t available, your coverage pays to fabricate parts with the highest quality replacements possible.
- Usage-Most owners of exotic cars consider their vehicle an investment and take mileage and use, into account. In simple terms, the less the car is driven the more it will be worth when sold. A standard Insurance policy for Collector or Classic cars limits the number of miles allowed per year. There’s no limit on usage with car insurance through our select carriers, so you’ll have the freedom to drive without worrying about mileage.
- Higher Risk of Theft-Because of their price tag and uniqueness, exotic cars may be highly sought after by thieves. Their parts have the potential for high profit on the black market so they may have a greater likelihood of being stolen, which further increases the risk to insurers.
- The Performance Factor-The very thing exotic cars are known for (their performance) is the main factor making them difficult and more expensive to insure. Most exotics can reach high speeds and have high horsepower creating an increased risk of crashing, which poses a high risk to insurers. For example, a Bugatti Chiron has a top speed of 261 mph and the McLaren 720S has a top speed of 212 mph. Our select partners, specialize in addressing the unique risks of accomplished individuals and will customize an insurance program for your needs.
How to Save Money on Exotic Car Insurance
Despite the increased risk posed by high-end performance sports cars, there are still ways to save on insuring them:
1) Be a Safe Driver: Like insuring a traditional vehicle, the best way to keep insurance costs reasonable is by practicing safe driving. Consider taking a special driving course designed for those who own high-performance, or exotic vehicles. “Such a course can help you enhance your knowledge of high-performance vehicles and how their handling differs from regular everyday cars.” (2) Some insurers may offer a discount for learning how to safely operate your exotic car. Not having a history of reckless driving, violations for excessive speed or serious violations such as DUIs will all contribute to a lower insurance cost.
2) Reduce Chance of Theft: Doing your best to protect your vehicle from theft and vandalism involves installing anti-theft devices such as VIN window etching, specialized car alarms and storing your car in a secured garage or storage facility. These measures often qualify for discounts or credits on your auto policy.
3) Limit Drivers on the Policy: If you insure more vehicles than drivers, insurers know you can’t possibly drive all the cars all the time. Teenage or new drivers are considered high-risk drivers, and you may face higher costs because of their inexperience. Statistically, teen drivers are involved in more accidents, so having them on your policy could be a red flag (3)
Customized Protection for your Custom Vehicle
Because of their increased risk to insurers, expensive, high-end performance or exotic cars can be difficult and costly to insure. A specialized auto insurance policy through a premium insurance carrier is often the best way to safeguard your prized vehicle. McSweeney & Ricci’s Private Client Group partners with select insurers Chubb, Pure, Cincinnati, Hagerty, Hanover Prestige, Berkley One and Vault to offer customized insurance protection for your exotic vehicle, high value home, vacation home, boat and more. Policies provided by premium insurers may offer coverage not available through traditional insurance companies.
- Premium insurers offer agreed value coverage rather than actual cash value. Agreed value provides much more protection and ensures that in the event of a total loss, you’ll receive the amount you agreed the car is worth rather than having to negotiate with an insurance adjuster.
- High Net Worth Insurers Understand Exotic Vehicles. Our premium partners understand the high-end vehicle market and what it takes to maintain your car in its original condition. If you experience a loss, you’ll have your choice of repair shop and trusted mechanic, or our premium partners can provide you with a list of skilled technicians. In addition, your repairs will be made with original manufacturer’s parts whenever possible. When original parts are not available, your coverage provides for parts fabricated with the highest quality materials to help maintain the value of your car.
- Protection for Events. Specialty insurance companies may offer coverage not available through standard car insurance policies such as coverage for your vehicle while it’s on display at a car show or race.
- Premium Advantages. Other advantages to premium car insurance protection are the perks included with your coverage such as worldwide protection, rental car reimbursement, pet injury protection and even counseling fee reimbursement after a carjacking incident.
The professionals in our Private Client Group will ask questions and recommend the specialty insurer best suited to your individual needs. With over fifty years of experience providing premium insurance solutions to accomplished individuals, trust our team to keep you, your passengers, and your investment protected. In addition to auto insurance for traditional and exotic vehicles, we provide high value home insurance, watercraft and yacht insurance, collections & valuables insurance, and more, in addition to offering concierge-level service and white-glove claims handling.
For more information on insurance for your specialty, exotic vehicle or high-end performance sports car, contact the risk advisors in McSweeney & Ricci’s Private Client Group by calling (844) 501-1361 or request a complimentary quote on our website.
Sources:
1) Exotic Car Brands Bounce Back In Post-Pandemic Boom (forbes.com)
3) What Is Luxury Car Insurance? (caranddriver.com)
5) Exotic Car Insurance | Get Matched with Local Agents | Trusted Choice