Is insurance for exotic cars in NJ relatively higher?

Exotic Cars – uncommon, unique, custom made in many cases and very very expensive. We are talking about Ferrari, McLaren, Lamborghini or Aston Martin just to name a few.

Their sticker price usually starts way above $100,000. Unique limited edition cars can go beyond a half a million dollars. Antique collector cars can even roll into millions of dollars. So will insuring exotics can make a significant dent in your budget? Are there substantial discrepancies in the premium? Here are some facts to consider:

1. Exotic automobiles require expensive original replacement parts, usually imported from foreign countries.

2. Special tools and extra training for technicians is a must, service and repairs will cost more compared to your average auto mechanic. On top of that, repair experts are available only in certain cities.

3. Unlike economic cars, high-end automobiles often don’t depreciate that much. If anything, limited anniversary editions can increase their value over the years. If they are damaged or totaled, the cost of replacing or fixing them are outrageously high.

4. High-performance automobiles attract thrill-seeking consumers who embrace speed and hazardous driving habits. As a result, owners tend to be labeled as “high-risk drivers.”

5. Certain cars are theft targets because they are highly sought after (mostly overseas), where their parts sell for high prices in the black market.

So how much is insurance on an exotic car?

I decided to estimate the cost of full coverage for three exotics and one high luxury car using my own profile. I am a 40-year-old woman with no points and no accidents. All providers automatically added my husband, who also has a clean record. For all four exotic cars, I’ve entered:

• Liability Coverage 100/300/100
• PIP $250,000
• Full Coverage* with $500 Deductible
• Full Benefits

* All prices based on MSRP not Agreed Value. Insurance cost may vary depending on many factors, even your credit history.

Here is the price rundown:

Insuring an exotic car may not be easy.

Not all companies will provide protection for brands like Lamborghini or Ferrari, and those who will, may be very selective with which model they will protect, and the requirements needed to comply are stringent.

High-performance vehicles are more difficult to handle. Driven by someone who has poor driving experience is considered a significant risk; therefore, companies may require a clean driving record, and there may be age limitation to be accepted on such a policy.

Rare vehicle insurance should be based on an agreed value of the car. Usually, providers go by actual cash value as reimbursement, and they may have a maximum reimbursement payout – if you total your $300,000 automobile and their maximum payout is $200,000, you will have to pay the $100,000 difference between maximum payout and the actual value.

Conclusion

Surprisingly, insurance premiums for exotic cars are relatively not that terrible when compared to their sticker price. Let’s take a look at the everyday vehicle: a $35,000 top line Honda Accord’s full coverage will cost around $2000 a year, this is about 5.7% of the actual car value. A $350,000 exotic McLaren’s yearly premium is around $6000, a mere 1.7% of the car value! One could argue that driving an exotic car is more economical. 

Whether you shop Honda or McLaren, call me to get the best price for your new vehicle insurance.

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