Luxury car insurance

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If you dream of owning a luxury car, you are not alone. But if your goal is to own a luxury vehicle, or if you already own one, you should be aware of the nuances of luxury car insurance. Owners of luxury and exotic cars have different insurance considerations than owners of standard cars. Because luxury and exotic cars tend to be relatively expensive, you should know what insurance coverages to consider to protect your investment.

What is luxury car insurance?

A luxury car is one that has higher levels of amenities, comfort, quality or performance compared to a regular vehicle. Exotic cars are a type of luxury car with a focus on speed and performance. An example of a luxury car is a Jaguar F-Type with a base price of $61,600 while an exotic car example is the Ferrari 812-Superfast with an manufacturer suggested retail price of $335,000.

If you are insuring a luxury car, expect to pay more for insurance than you would for a standard car. Since luxury cars are generally more expensive than standard vehicles, insurance costs are also higher. If your luxury car is damaged, the costs for replacement parts, repairs and labor could be significantly higher than for lower-end vehicles. Although you may be able to obtain insurance with a standard insurance company, depending on the type of vehicle you have, you may need to seek coverage with a company dedicated to insuring high-end vehicles.

Luxury car insurance coverages

If you own a luxury car, you must carry at least the minimum required insurance coverage limits in your state, just like if you are insuring a standard vehicle. You may want to consider the following car insurance coverages for your luxury car:

  • Liability coverage: Since luxury cars are more expensive than standard vehicles, you may have more assets to protect. Carrying higher liability limits can further protect you financially in the event of an at-fault accident.
  • Medical payments coverage: This coverage pays the medical bills for you and your passengers if you are injured in an accident, regardless of who is at fault. If you live in a no-fault state, you may need to purchase personal injury protection coverage instead of medical payments coverage.
  • Collision coverage: If you are involved in an accident and your luxury car is damaged, collision coverage may pay for the damages to your car after you pay your deductible. This is also the coverage that could pay for the value of your vehicle if it is totalled.
  • Comprehensive coverage: This coverage pays claims for broken vehicle glass, theft, vandalism, weather damage and damage caused by striking an animal. It is sometimes called “other-than-collision coverage.”
  • Gap insurance: If you finance or lease your luxury car, you might want to consider gap insurance. This pays the difference between the vehicle’s actual cash value and the loan amount.

You may also want to check with your insurance agent to see if your company might use aftermarket parts for repairs. If so, some car insurance companies offer original parts coverage, sometimes called “OEM coverage,” for an additional cost. This coverage means that replacement parts used on your luxury vehicle are original manufacturer parts rather than aftermarket parts.

Exotic car insurance coverages

If you own an exotic car, just like if you own a luxury car, you have to maintain at least your state’s minimum liability limits. Because exotic cars often have high horsepower and speed capabilities, you may need to seek out specialty auto or collector car insurance for a better selection of specific coverages, such as:

  • Agreed value coverage: With this coverage, both you and the insurance company agree to the value of your vehicle. If your vehicle is damaged, your insurer will pay up to the agreed upon value.
  • Automobilia coverage: If you own an exotic car, you may also own valuable collectibles from the manufacturer. Some specialty car companies offer coverage for your license plates, literature, hood ornaments, signs, displays and other automobilia.
  • Tools coverage: If you have personal tools used to maintain your exotic car, you may want to cover them under your auto insurance policy. If your company offers it, this option provides coverage for accessories, storage cabinets, tool boxes and tools. Normally these items are covered under your home insurance with a separate, and often higher, deductible than what may be on your auto insurance policy.

Exotic car owners may also consider comprehensive, collision, medical payments or personal injury protection, OEM coverage and gap insurance. Just like luxury car owners, you may also want to consider higher liability limits to further protect your assets in the event of an at-fault accident.

How to save on luxury and exotic car insurance

While luxury and exotic cars cost more to insure than standard cars, there are still ways to save.

Take advantage of discounts

Most insurance companies offer discounts that can help you control your car insurance premiums. Anti-theft measures like VIN etching on your windows, a car alarm or storing your vehicle in a locked garage could qualify you for a discount. Safety features such as anti-lock brakes, airbags, daytime running lights and electronic stability control could similarly reduce your premium. Taking advantage of as many discounts as you can could reduce the cost of your car insurance.

Store your vehicle in the off-season

If your car will be kept in a garage and not driven for a length of time, you may be able to save money by removing certain coverages. You will need to check with your insurance provider to confirm that you are still meeting your state’s insurance requirements. If you have a loan or lease, you may also want to check with your financial institution to ensure that you carry the coverages they require.

Frequently asked questions

What is the best luxury car insurance company?

The best car insurance company for luxury cars will depend on your specific needs. The company that is best for you will have the coverages, discounts and features that you are looking for. Getting quotes from multiple companies and comparing them can help you determine the right company for your needs.

How much more is insurance for a luxury car?

Insurance companies use multiple factors to determine premiums, including the value of the luxury car, the types of coverages and limits you choose, your age and your driving record. However, since they tend to be more expensive than standard vehicles, you should expect to pay more for insurance when you are insuring a luxury or exotic car.

How can I get the cheapest rates for luxury and exotic car insurance?

Although car insurance for luxury and exotic cars is more expensive than insurance for standard cars, there are ways to save. You may be able to save money on your car insurance premiums by shopping around and comparing quotes, keeping a clean driving record and taking advantage of discounts.

Written by
Mandy Sleight
Insurance Contributor
Mandy Sleight has three years of experience writing for insurance websites such as Bankrate.com, MoneyGeek and The Simple Dollar, and has been a licensed insurance agent since 2005. Mandy writes about auto, homeowners, renters, life insurance, disability and supplemental insurance products.
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Insurance Editor