Luxury car insurance

Luxury and prestige car owners can benefit from having comprehensive car insurance which is the highest level of car cover. While specific features differ between insurers, some things that are commonly covered by car insurance can include:

• Damage to your own vehicle. If your vehicle is damaged in an accident, your policy can cover the repair costs.
• Loss or damage by fire. Your car is covered if it’s damaged or destroyed by a fire.
• Storm or flood damage. Comprehensive car insurance may cover the repair or replacement of your vehicle if it’s damaged by a flood or storm (there may be exclusions and limitations to this cover).
• Damage to another vehicle or property. If your car causes damage to another person’s vehicle or property, your responsibility for the repair costs is typically covered.
• Theft or attempted theft. Your car insurance may cover the cost of damage to your vehicle from attempted theft or a replacement if it’s stolen.
• Vandalism or malicious act. If your car is damaged by vandalism or other deliberate damage, your insurance provider may cover the repairs.
• Windscreen or window glass damage. Most insurers offer cover for the cost of windscreen or window glass repairs in the insurance policy or offer this as an optional extra, with some even offering this feature excess-free.
• Towing. Car insurance can cover towing costs if your car is damaged in a road accident (some insurers may limit cover to within a certain distance of home or the repair shop).

You should always read the Product Disclosure Statement (PDS) of any insurance product before purchasing, as the PDS will include the full details of the limitations, exclusions, terms and conditions of your cover. You should also read the Target Market Determination (TMD) to check whether a policy is suitable for you – and your luxury vehicle.

The cost of car insurance for luxury cars is likely to be expensive. One of the contributing factors could be that specialised repairs and replacement parts can be quite hard to source and expensive (usually imported). As with most insurers, having full comprehensive cover for your luxury vehicle will always be the more expensive option over Third Party Property Damage and Third Party Fire and Theft, as it provides the highest level of cover available.

Your car insurance premiums are also heavily influenced by several factors that are individual to you, like:

• Your vehicle’s age, make and model
• Any modifications to the vehicle
• Your claims history
• Where the vehicle is parked at night

Agreed or market value is a payout option from an insurer for the total loss of the insured vehicle. For a slightly higher premium, you can insure your luxury car for an agreed value, instead of the market value that car insurance policies usually use. Given the value of prestige vehicles and luxury cars, you may opt for an agreed value as these vehicles can be expensive to repair and may appreciate in value over time.

The same reason you should get car insurance for any vehicle: to give you financial protection for when something goes wrong. Whether your expensive car is parked in your home garage or on the road, a prestige and luxury car is a substantial investment you’ll want to protect.

A prestige or luxury car can be a highly engineered performance vehicle or a vehicle with a high-end market value. These can include vehicles with specific modifications, or made by famous marques such as Ferrari, Lamborghini, Porsche, Aston Martin, Rolls Royce, Bugatti and more.

Some key factors that insurers consider when classifying your car as luxury or prestige can include (but aren’t limited to) the following:

• The value of the car, which can be extremely expensive
• The rarity of the vehicle, as several supercars are produced in limited amounts
• The performance and specs of the vehicle
• If the vehicle is subject to luxury car tax, which can also include more accessible brands like Volvo and Toyota.

Not all insurers will agree to cover high-end luxury cars (especially without agreed value cover), even with their standard policies. This can be for several reasons, including:

• The value of the vehicle is so high the insurance company may find it prohibitive to insure it
• The vehicle is so rare the insurance company doesn’t have enough data on it to calculate a premium
• Replacement parts are difficult or expensive to source.

This is why you may need to go to a specialty insurance provider to get cover for your high-end vehicle.