I’m sure luxury car owners search for the best car insurance to protect them and their cars. Due to luxury cars’ high performance and high quality, the insurance cost is higher than the average car because it costs more to repair or replace.
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What kind of cars are luxury cars?
A car that has high levels of comfort, quality, performance, equipment, amenities, and status compared to other regular cars is called a luxury car because the car has luxuries that no regular car has. Normally the price is higher than the average car. This term is actually subjective because it reflects to 2 major things, 1. The qualities of the car and 2. The brand of its manufacturer. Luxury brands like BMW, Mercedes-Benz, and Audi rank above the premium of the common car insurance. The size is a great matter when it comes to luxury cars, most luxury cars used to be large vehicles, but now there are smaller sports-oriented models also compact luxury vehicles like off-roads and hatchbacks can be a sport. The smaller luxury cars are modern trends, traditional luxury cars were large.
Luxury car insurance cost
As you noticed, luxury cars cost more to insure than a typical vehicle’s coverage. The average luxury car insurance rate is $2,989 per year, or $250 a month. A number of factors are considered when calculating a luxury car premium, such as the expensive repair costs and the high chance of theft. Also, factors such as where you live, how you store and drive your car, and even your credit score impact your insurance rates.
Why Should You Insure Your Luxury Car?
Luxury cars have luxurious, inherently expensive parts. Therefore, any damage to such parts only means a really huge chunk of money out of your pocket to replace the parts or repair the damages.
With luxury car insurance, you can rest assured that if an accident occurs and your precious car gets damaged, the insurance company will take care of the finances.
Have you heard of The Motor Vehicles Act? This act demands all cars that are driven on public roads to be insured with at least a basic vehicle insurance policy. So, at least a Third-party Liability policy is required if you want to take your baby out for a spin.
How much insurance do I need for my luxury vehicle?
How much car insurance you specifically need will depend on your needs. How often do you drive your car? In which area do you usually drive it? Where do you store it? Are the chances of theft high? In which state do you live? Each state has minimum liability insurance requirements.
What coverages do luxury cars need?
1. Liability coverage:
Liability covers other people’s vehicle repairs and medical bills after accidents that you were at fault. The costs of repairing any property damaged and the medical bills resulting from an accident are covered. Almost all states require a minimum amount of liability insurance, but luxury cars are more expensive than an everyday car, so carrying a higher liability limit can be very beneficial financially if you had an at-fault accident.
2. Collision coverage:
Collision coverage will cover damages done to your own vehicle if you’re involved in an accident with another car object, or you get into a single-car accident. If your car is totaled (totaled means the cost of repairs exceeds the value of the vehicle) in an accident, collision coverage will pay the value of your car.
3. Comprehensive coverage:
This insurance will cover the expenses of damages to your own vehicle that is caused by something other than an accident, like vandalism, broken vehicle glass, theft, damages caused by a natural disaster, and damage caused by striking an animal. You can install anti-theft and tracking devices to make comprehensive coverage more affordable, but still, this coverage can be costly. Comprehensive is not necessary at all times, especially if your car is replaceable. It’s good to know that comprehensive is sometimes referred to as “other-than-collision coverage.”
4. Medical payments coverage:
Medical Payments Coverage, commonly known as MedPay, covers the accident-related medical expenses for you, your passengers, your household members, and other policyholders regardless of who is at fault. Personal injury protection may be mandatory if you live in a no-fault state. In that case, you won’t need medical payments coverage because this coverage is more limited.
Notice: While liability insurance is required in the US, other coverages mentioned above are optional, but we highly recommend you to get them.
The two coverages mentioned below are optional coverages that are good to know about them, maybe you’ll need them.
5. New Car Replacement Coverage:
If your luxury car is totaled, with this coverage, the cost of a new model of the exact vehicle will be given to you, not its depreciated value. You should know that you can add this coverage only if you have full coverage car insurance.
6. Gap insurance:
Gap insurance is excellent if you are financing or leasing a luxury car, and it covers the difference between the amount your insurer pays out if your vehicle is stolen or considered as totaled and the price you paid for it. For better comprehension, we’re going to explain with an example: reckon you loaned a brand-new car for $30,000, and you still owe $25,000 on your auto loan when your vehicle is totaled in a covered collision. Your collision coverage will pay your lender the exact depreciated value of the totaled car; let’s say it’s worth $19,000. If you don’t have gap insurance on your policy, you yourself have to pay $6,000 out of your pocket to settle the auto loan on the totaled car. That means you paid $11,000 and have no car; however, your insurance provider will pay the $6,000 for you if you have gap insurance.
How to lower luxury insurance rates?
• multi-Line Discounts:
Almost all insurance companies offer a discount for having multiple insurance policies with them. For example, if you already have a life insurance policy with an insurer, getting your auto or home insurance with the same insurance company can get you a discount for covering your luxury car through them as well.
• Reducing Coverage:
You can omit all coverages from your policy except for comprehensive when you do not drive the luxury vehicle for an extended period of time. We recommend you to keep the comprehensive coverage in case any damages to your car occur by other possibilities that we discussed.
If you don’t have a secure place like a garage or parking, we advise you not to drop collision insurance because situations like hit-and-run incidents are not covered.
• Luxury Vehicle Safety and Anti-Theft Discounts:
Safety features will always get you discounts, especially on your comprehensive coverage. Safety features can be anti-lock brakes, daytime running lights, airbags, and traction control systems, also the ones that reduce the chances of theft such as car alarms, secure parking, electronic tracking devices, and vehicle identification number (VIN) window etching. VIN window etching is an excellent option to have on your car. Actually, the VIN engrave onto the windshield and windows of your vehicle. It is also easy to get; you can get and install at a dealership or auto body shop for around $100 to $200. This feature makes your car more recoverable by law enforcement agents, and thieves looking to take apart your vehicle less likely to come for your vehicle because they have to discard traceable parts.
Although many of these features are already equipped on luxury vehicles, so, don’t forget to double-check if you receive all possible discounts from your insurer.
