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Exotic Car Insurance: The 5 Keys to Get Proper Coverage for Your Vehicle

Updated: August 1, 2018

Getting an exotic or luxury car is a lot of fun. However, the costs of these vehicles do not stop at the cars themselves.

A lot of buyers ignore the additional cost of having to get exotic auto insurance for the vehicle.

When compared to regular car insurance, exotic car insurance often comes with higher premiums.

There are a few reasons for this, such as the added cost to repair exotic car parts, or the increased likelihood of the car being stolen or vandalized.

Here are the fives keys to get proper exotic car insurance coverage for a luxury or sports vehicle.

Ask About Exotic Car Insurance Driving Experience Requirements

There are certain driving requirements if you wish to get an affordable exotic car insurance policy. Many insurance companies will require that the driver of the exotic vehicle have at least five years of road experience.

If the car is damaged in an accident and the driver had less than five years of driving experience, the insurance company may not cover the damage caused by this crash.

There are even companies that will expressly forbid the owner from allowing anyone with less than five years of road experience to drive this vehicle.

If the car is damaged in an accident and the driver had less than five years of driving experience, the insurance company may not cover the damage caused by this crash.

Having owned a luxury vehicle in the past is a good way to get discounts on exotic car insurance. This shows the insurance company that you know how to drive, handle and care for such vehicles. They factor this into the premiums offered.

For those who do not meet the driving experience requirement, you may have to look into other exotic car insurance discounts to make up for the increased premium prices. This is necessary for younger individuals who may want to own and drive luxury or sports vehicles.

Understand your Luxury Vehicle’s Value

Understanding the value of your luxury vehicle and how this value factors into the exotic car insurance policy is of fundamental importance. Not only must the owner know exactly how much the car is worth when the policy starts, but they must understand how a changing value is handled by this policy.

There are also exotic car insurance policies where the stated value is covered, which is often less than the actual value you can get by selling the car.

For example, certain policies start with the actual cash value of the vehicle. They will cover this amount. The value is then depreciated, with the owner of the car paying a deductible.

There are also exotic car insurance policies where the stated value is covered, which is often less than the actual value you can get by selling the car. While this gives you less money if the car is totaled, it may mean you pay less in exotic auto insurance premiums.

The best thing you can do is to get the vehicle appraised before going in to discuss exotic auto insurance policies. This gives you a starting point in terms of haggling over the value with the insurance company.

With any exotic car insurance policy, the insurance provider and the owner will come to an agreement on the car’s value.

Ask if the Luxury Car Insurance Policy Covers Appreciation

Classic cars are different from regular vehicles in many ways. Not only are they more expensive to maintain, they also go through value changes in a different manner.

It is important to talk with the insurance provider regarding the impact of appreciation on the exotic car insurance policy.

While a regular car will lose value as you drive it for more miles, the same cannot be said for all classic and exotic vehicles. Most classic cars will increase in value as the years go by, especially if the number of units of a specific model begins to dwindle.

It is important to talk with the insurance provider regarding the impact of appreciation on the exotic car insurance policy. There must be an appreciation clause in the policy. This allows for automatic appraisal of the vehicle and renewal of the policy every few years.

After two or three years pass, the car is appraised and the insurance company meets with the buyer to agree on a new value.

Policies that have no clause for appreciation with regards to the vehicle’s value will not be worthwhile in the long term.

Understand your Responsibilities in Relation to Exotic Car Insurance

Every exotic car insurance policy comes with a lot of terms and conditions. In this respect, exotic car insurance does not differ from regular auto policies.

If you exceed this limit, you may find yourself driving the exotic vehicle on the road without any insurance coverage.

It is not enough to know the basics regarding your luxury car’s insurance policy. You must familiarize yourself with the different conditions you must meet to keep the policy in effect.

For example, many exotic car insurance policies only allow the vehicle to be driven for a set number of miles per year.

If you exceed this limit, you may find yourself driving the exotic vehicle on the road without any insurance coverage. This can result in significant out of pocket expenses if you get into an accident.

Some policies are only in effect during certain seasons. For example, you can get cheaper exotic car insurance policies that only apply during the spring, summer and autumn months. Winter months are not covered, because the risk of accidents increases thanks to the wintery weather conditions.

Discover How to Reduce your Classic Auto Insurance Premiums

There are many ways to reduce auto insurance premiums on classic car insurance. One of the best ways is to show that this will not be your primary vehicle.

There are many exotic car insurance policies where you can get a significantly reduced policy where only comprehensive coverage is present.

Classic car owners who plan to use the vehicle for everyday commutes will pay a lot of money in exotic car insurance. In contrast, someone who already has a primary vehicle will get offered lower exotic car insurance premiums.

Why does this happen? Because owning a primary vehicle shows the insurance company that you will not drive the exotic car on a regular basis. When the vehicle is driven less, the risk of accidents and subsequent damage is also reduced. This results in lower premiums, because the insurance company is taking on less risk.

There are many exotic car insurance policies where you can get a significantly reduced policy where only comprehensive coverage is present. This means you are never planning on driving the car, and wish to keep it in your garage as a collector’s item.

Keeping comprehensive coverage ensures the exotic car is protected from theft, vandals or natural disasters.