What Type of Insurance is Best for Exotic or High-Value Cars?
If you own an exotic or high-value car, you need a particular type of auto insurance policy to cover it, such as a policy based on the agreed value in which you and your insurance provider decide a specific price limit for replacing the car. As exotic or high-value cars are among the most expensive vehicles in the world, you need a high coverage insurance policy to cover them against various perils such as theft, accident damages, and fire or smoke damage. They’re also called supercars and includes car manufactured by expensive and high-value brands like Lamborghini, Bentley, Porsche, Ferrari, and McLaren. The definition of an exotic or high-value car varies from manufacturer to manufacturer, but in most cases, any car that is higher than what ‘blue book’ estimates based on the model year.
Exotic or high-value cars, when they age but also carry additional value, come under the category of the antique, classic or restored car. Antique vehicles also need a special auto insurance policy. In this article, you will learn what type of Insurance is best for these types of cars and why it’s essential to review the value of your exotic or luxury car to avoid going underinsured.

Why is a standard Auto Insurance Policy not a good option to insure Your Exotic or High-Value Car?

Following are the significant reasons why you can’t cover your exotic or high-value car with a standard auto insurance policy, such as:

  • Standard Auto insurance is designed to cover newer but lower-value vehicles prone to depreciation and driven by daily drivers.
  • A standard auto insurance policy doesn’t provide agreed value coverage, which means there’s no guarantee that the maximum payment you can get for a claim will be enough to cover the loss to an exotic or high-value car. The value of a total loss payment in standard Insurance is estimated after the total loss occurs and is mostly based on actual cash value, especially with depreciation.

Why type of Insurance is best to insure Exotic or High-Value Cars

Exotic or Classic Car Insurance, a subcategory of collectible car insurance, is the best choice to cover exotic, high-value, and antique cars. It has almost all standard auto insurance coverages but with higher limits. Exotic Car Insurance is based on Agreed Value.

Agreed Value

Agreed value is an essential component of exotic or classic car insurance. With Agreed Value Insurance, the car owner and insurance company decide the car’s value at the start of the policy. The agreed value can be significantly higher than the purchase price of your car. This value can also be changed in case of any restoration or upgrade to your car. Plus in time the car may actually appreciate. That’s why restored exotic or high-value cars are also eligible for exotic insurance.

If your car is a total loss due to a covered peril or is stolen, you will get the agreed value amount from your insurer without any depreciation, something which is not possible with standard auto insurance.

Stated Value

Some exotic or classic car insurance policies offer stated value in which both agreed value and actual cash value come into play. In case of a covered claim of the total loss, your insurer will reimburse you the stated value (the value of your car you have told to your insurer) or actual cash value, whatever the less.

Factors affecting the rates of Exotic Insurance

An insurance company considers a wide range of factors when quoting the premium of your classic car insurance policy, such as:

Car Manufacturing Manufacturing
Age of Car
Mileage Driven
Frequency of usage
Exterior or interior conditions of car
Age of Driver
Whether the car is stored indoors

Why It’s important to Review the Value of Your Exotic, High Value, or Antique Car

Over the last few years, the prices of exotic, high-value, and antique cars have spiked to new heights, and the effects of the pandemic have further fueled this surge. According to the latest price index, the prices of supercars and antique vehicles have gone up by 45% over the last three months only. The skyrocketing prices of exotic or high-value cars have also seen a 12% rise in exotic car insurance premiums during the same period. There are many reasons for the spike in classic car prices, including high demand for cars, rising costs of automotive parts, and issues with the supply chain.

These highly inflated prices have made it necessary for exotic or high-value car owners to review their car’s value regularly to maintain optimum coverage. Knowing your exact car’s value helps you get the maximum agreed value that can cover your total loss claim. In some cases the carrier may required an auto appraisal. This appraisal is made by someone with the proper knowledge and credentials.  This is an added benefit as the carrier will generally review and accept the report. This takes away some ambiguities that may surround your high value car.

If you need additional help, our agency has multiple carriers who specialize in this type of coverage.

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