How to Get Car Insurance on an Exotic Car
Exotic cars can certainly be expensive, but paying to insure one should not break the bank.
What Qualifies as an Exotic Car?
No, your 1999 Toyota Corolla that you had painted fire-engine red with a yellow racing stripe on the side is not exotic, though it might qualify as odd. If you paid less than $100,000 for your vehicle, it is likely not a luxury or exotic vehicle. What separates the exotic from the simply nice is high-quality materials and brand reputation.
And not just high-quality materials and vehicles—luxury materials and brands that are associated with opulence and performance more than with being a great car for a family of five. As great as your aforementioned Corolla probably is, when we say exotic, we’re talking Ferraris and McLarens, not Toyotas and Fords. Often, these vehicles are expensive to maintain and require specific knowledge and tools, making them expensive in and of themselves.
What’s Different About Exotic Car Insurance?
If you’ve ever purchased a “regular” car, you know that the second you drive it off the lot, it depreciates. Not so with exotic cars, which are assumed to appreciate, rather than depreciate, over time. As such, exotic car insurance is a different market entirely, and you’re not likely to have much luck if you call up a nationwide auto insurance company asking about insuring your Ferrari. Exotic cars are usually kept in a garage and out of harm's way, rather than on the street, which entirely alters the risk calculus.
Because exotic cars are all unique and expensive, insurance coverage is typically tailored to the individual driver and car’s needs rather than by state minimums.
Where to Find Exotic Car Insurance
Your best bet is choosing a reputable specialty insurance company, which will be hard to find just by searching for “exotic car insurance” + the name of your state or metropolitan area.
Your best bet is to speak to the experts: exotic car dealerships or members of exotic car clubs. They will certainly have the insider knowledge necessary to make a decision that no amount of googling can give you.
How Do I Know the Company Is Reputable?
If you find a company with a lot of stock photos and can’t find a profile on the Better Business Bureau’s website, you should be incredibly skeptical. This is where googling comes in handy: make sure that you thoroughly research the company before acting on expert advice to make sure that you’re not having a fast one pulled over on you.
How Are Exotic Cars Valued?
The two main methods are the stated value and agreed value. The agreed value is typically determined by an expert appraisal and a thorough analysis of photos and specifications, while the stated value is simply the actual cash value of the car, which is typically less. In most cases, you’ll want an agreed value policy.
How to Get Exotic Car Insurance
Step 1: Take photos of the engine, interior, and exterior of your vehicle. This will be helpful when determining the agreed value with your insurance company.
Step 2: Get your exotic car appraised. This step is absolutely essential.
If you only know the sticker price but have done additional work on your vehicle and it is totaled or stolen, your insurance company won’t pay you the difference if you have a stated value rather than agreed value policy. Make sure this appraisal notes the agreed value.
Step 3: Know what you can and can’t do in order to stay covered by your insurance. If you can’t drive more than a certain number of miles annually, don’t risk it, or your coverage may be voided. If you can’t let anyone but yourself drive the vehicle, do not chance it, and likewise for restrictions on where you can’t drive your exotic car, such as in the five boroughs of New York City (a common restriction).
Step 4: Annually reassess your exotic car and update the agreed value. Every time you do work or keep an exotic car fresh and clean for another year, it should go up in value—and your insurance policy should reflect that.
How Much Does Exotic Car Insurance Cost?
It really, really depends. According to Forbes, the $212,000 Mercedes CL600 would cost you $2,754 annually to insure, on average, in 2010. But that’s not that expensive, at least compared to the sticker price of the vehicle.
How to Save Money on Exotic Car Insurance
Like any car insurance, you can save money by being a safe driver, dropping unnecessary coverage (though that’s even riskier with an exotic car than it is normally), looking for a policy that limits the amount of mileage you can drive your vehicle, and limiting the drivers on your policy.