How Does Exotic Car Insurance Work?

Finding Insurance Coverage for Your Exotic Car

Young woman stands in front of yellow convertible
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Exotic cars are among the most expensive vehicles in the world. This category includes vehicles manufactured by Lamborghini, Bentley, McLaren, Porsche, Pagani, and Ferrari. Exotic cars often feature sleek coupe or sports car profiles, sometimes with sci-fi touches such as wing-like passenger doors. Also called “supercars,” these exclusive vehicles are prized for their speed and performance. As a result, even used exotics are priced as high as $1 million or more.

Nothing is typical about an exotic vehicle—including finding the right car insurance. Due to their high values, exotic cars require customized insurance policies. For example, a two-door Ferrari 458 Italia incurs a $655 average loss payment per insured vehicle year, so it’s not surprising that a standard-issue plan just won’t do for an exotic vehicle. Learn the ins and outs of insuring an exotic car.

Key Takeaways

  • Exotic car insurance is a subcategory of collectible car insurance. It’s sold by both insurers that specialize in collectible cars and by standard insurers.
  • This type of insurance differs in two major ways from standard car insurance: agreed value and use limitations.
  • Many restrictions often come with exotic car coverage, including who can drive the vehicle, where it can be driven, and when.
  • Customer service is extremely important when comparing insurers—make sure to choose an insurer that understands exotic cars.

What Is Exotic Car Insurance?

Exotic car insurance is a subcategory of collectible car insurance, said Matt Robertson, vice president of Leland-West, an exotic car insurance company that offers coverage in 48 states. Whether a vehicle is an “exotic,” “classic” or a “sports car” may be up to the insurance company or state regulations, he said. Leland-West maintains a database of classifications by make and model. An exotic car can also age into a collectible or antique car over time, Robertson said.

Insurers specializing in collectible and exotic cars include Leland-West, American Collectors, Heacock Classic (which sells coverage from American Modern Insurance Group), NCM Insurance and Grundy Insurance. You may also be able to obtain exotic car insurance through your regular auto insurer. For example, Geico sells American Modern exotic coverage.

However, major insurance companies may also refuse to sell you a policy for an exotic car. New York State maintains a difficult-to-insure list of vehicles based on data provided by the state’s leading auto insurance companies. The site points out that few insurers will cover vehicles that are exotic, exceptionally high-value (more than $100,000), or limited-edition due to high replacement and repair costs, combined with too few vehicles in the driving pool. For example, all models of Pagani, Ferrari, and Porsche show up on the list.

As with any other car on public roads, your exotic car is required by state law to have liability insurance to cover any bodily injury, death, or damage you cause to others. Depending on your state, you may also be required to carry uninsured motorist coverage—which will likely come in handy if you have an accident with an underinsured driver who can’t cover the damage to your expensive car.

But exotic car insurance is more complicated than what you’d buy for the average sedan due to the vehicle’s higher value and higher cost to repair, Robertson said. Optional auto comprehensive and collision insurance will cover damage to your exotic car when you’re at fault or if a non-collision accident occurs, such as if your Lamborghini is stolen. These types of coverage may be a wise choice for an exotic car. For example, Porsche 911 Turbo convertible 4WD comprehensive losses are 440% higher than average, and Ferrari 488 GTS convertibles have collision losses 408% higher than average, according to the Insurance Institute for Highway Safety (IIHS).

If you own more than one exotic car, an insurer may offer to insure all vehicles with one liability premium.

Types of Policies Available for Exotic Cars

Exotic car insurance will likely include coverage that is standard in the industry, including pet coverage, windshield replacement, trip interruption coverage, and roadside assistance—and the latter two could come in handy if you’re planning to attend auto shows. But because of their unique nature, exotic cars also tend to require unique insurance policies tailored to each vehicle. Exotic car insurance will differ from a traditional policy in two major ways, detailed below.

Agreed Value

​​”The standard insurance method for determining value is not so friendly to the exotic car owner,” Robertson said. If your car is declared a total loss due to theft or an accident, traditional insurance coverage offers the vehicle’s depreciated value, considering age and wear. But a policy designed for exotic cars is based on the agreed value, where the owner and insurer agree on the value of the car, without depreciation, before the policy is issued.

In most cases, you won’t need to get an appraisal, but the car’s current condition and the market value of similar vehicles will determine its value.

Use Limits

Many exotic car insurance policies cover pleasure use or driving to an auto show, but not everyday use or running errands. Insurers may or may not cover the car when you’re at a motel or a restaurant en route to your covered destination. Before signing up for a policy, ask the insurance underwriters about any use restrictions regarding pleasure, daily, or occasional driving use, ​​Robertson said. You may be able to purchase an additional endorsement, or rider, that allows you to occasionally drive your car to and from work. But even an endorsement for that purpose doesn’t include stopping at the dry cleaners along the way, he said.

Your policy may also come with annual mileage restrictions, or the premium may change based on your mileage. For example, some exotic policies limit you to just 6,000 miles per year, although you may be able to add mileage for an extra fee.

If you’re in an accident and have violated your policy’s use limits, your policy likely won’t be renewed, Robertson said.

Optional Features

Some policies offer additional features or options. However, Robertson said many of these bells and whistles aren’t necessarily in demand by exotic car owners.

  • Higher deductibles: You can choose a higher deductible for comprehensive and collision coverage, which is in line with an exotic car’s higher price tag.
  • Parts replacement: High coverage amounts (up to $2,000) for lost or stolen parts.
  • Towing coverage: Higher towing coverage amounts.
  • Relocation: If an emergency requires you to move your vehicle out of its garage, this coverage helps safely relocate it.
  • Racetrack items: Some exotic cars are built for racetrack performance, and insurers may cover fire extinguishers, roll covers, and other items for the racetrack—but typically not your car while it’s driving at the racetrack.

Exotic Car Policy Fine Print

When shopping for a policy, ensure you’re comparing your options accurately. Ask about policy expectations around usage, limits, and the car’s value.

You may need to meet certain requirements to qualify for an exotic car policy, such as:

  • All household drivers must have a good driving history and be at least 25 years old.
  • Drivers must have another insured car for everyday use.
  • No daily driving beyond pleasure or car enthusiast shows—so no running errands in your Pagani!
  • The exotic car must be parked in an enclosed, locked garage.

How To Choose the Best Policy for Your Exotic Car

With all of the above in mind, here’s what to think about when you shop for exotic car insurance.

Know Your Car’s Value

If possible, compare selling prices for similar cars or get an estimate through a car valuation website.

If you’ve made serious modifications to your car, you may find it more challenging to determine its value. “By customizing your vehicle, you’re in fact altering it from factory stock into a unique vehicle,” Robertson said. “This throws the valuation process into a tizzy. You need someone who understands the process to not devalue the exotic car due to modifications.”

You may need to provide a potential insurer with a parts list and a description of your changes so you can negotiate an agreed value for the car and its new parts. In addition, the modifications you made may not appeal to the next buyer and could downgrade the vehicle’s resale potential. “Your dream car is maybe not anyone else’s dream, and even if customizations cost you money, perhaps no one else wants it that way,” said Robertson.

Seek Insurers With a Good Customer Service Track Record

It can be a bit more challenging to find background customer service information for specialty insurers—for example, most don’t appear on the annual J.D. Power report of best car insurance companies. You may need to look up reviews with the Better Business Bureau or other online review sites, or you can ask fellow exotic-car owners in person or on message boards.

“You want proper claims handling, and personal service where you can get on the phone with a real person,” Robertson said. He suggested also investigating whether your auto club endorses the insurer—as Porsche does for Leland-West.

Some insurers specializing in exotic car insurance can’t offer policies in certain states, so ask at the outset if they work with exotic car owners where you live.

Search for Comprehensive Standard Policies

When you call or meet an agent to get a quote, it’s important to disclose everything you can about your exotic car. For example, you should provide the car’s age, where you store it, how often you drive it, and typical mileage. You may need to send digital photos of your vehicle and your garage.

Ask what’s included in the standard exotic coverage policy and which types of specialty coverages are offered as optional additions.

Consider the Provider’s Financial Stability

You can investigate some insurers with A.M. Best, but be aware that some specialty insurers won’t be rated.

Inquire About Discounts

Some insurers provide discounts for insuring multiple exotic vehicles, high-value collections, a claims-free history, car club memberships, anti-theft devices, accident prevention, and garaging. If you choose an exotic car insurance policy offered through a traditional insurer, such as GEICO, you may qualify for a multi-policy discount.