Are you looking for insurance for your Maserati, McLaren or Rolls Royce? You should have no trouble finding it in the United States, if you are willing to pay the price.
Unlike British Columbia, where luxury car insurance is becoming harder to buy, U.S. insurance companies report they have no plans to change their luxury car policies.
In British Columbia, the government sells automobile insurance, which had included insurance for Porsches, Ferraris and Bentleys. But the government insurance provider, ICBC, announced in November it is pulling out of the high-end car insurance market.
It is phasing out coverage on cars worth more than $150,000 because providing it puts too much of a burden on drivers of more mainstream vehicles, ICBC said. The basic ICBC insurance policy for all types of cars is about $1,000 a year, but the cost to repair luxury vehicles is far more than the cost of repairs to a Honda or Hyundai.
A McLaren 650S with a 640 horsepower motor worth $265,000 or a Bentley Mulsanne eight speed worth $303,000 and similar vehicles have hand-tooled parts and high-end metals that cost more to replace or repair. The average cost for repairing a luxury car is $13,000 compared with $2,500 for a typical family vehicle, ICBC said.
Loretta Waters, vice president of the Insurance Information Institute, says none of its members have said they plan to stop their coverage for high-end cars.
“Typically, the detailed work and expensive materials used in these cars is more expensive to insure. Some of these cars even appreciate in value, but no one has said they are pulling their coverage,” Waters says.
Insurance for a luxury car can cost $5,000 to $6,000 a year, says Jerry Hourihan, president of AIG Private Client Group, U.S. and Canada. AIG sees the withdrawal of ICBC from the market as an opportunity for AIG to acquire more business in British Columbia, he says.
“There is no cause for concern about obtaining coverage in the United States or the rest of Canada,” Hourihan says. “We offer high deductibles for physical damage to keep the costs in check. Of course, the rate depends on a person’s driving record, where they live and other factors.
“However, a person who owns this type of car is going to want good coverage on the liability side to protect against lawsuits,” he adds. “Car owners are going to want to buy from a company that knows the market and can back you up when you need it. Buying the cheapest insurance is not the way to go.”
The Hagerty Group LLC, an insurance group based in Golden, Colo., and Traverse City, Mich., provides insurance for collectible cars and luxury cars that are not the owner’s primary vehicle.
“These cars hold their value,” says James LaClair, vice president of Hagerty Canada. “Insurance rates are always subject to change, but we think we are appropriately priced. We have no plans to pull back from the market or make any changes.”
Steve Oakley, senior vice president and chief actuarial officer for PURE Auto Insurance, said luxury car insurance is still available from PURE and there should be no drastic changes in rates in the near future. Rates can range from $1,400 to $5,000 or more a year for a high-end car.
“With all of the new technology that is available — cars can brake themselves or even drive themselves — there will be fewer accidents and fewer cars will get dinged up and fewer people hurt,” Oakley says.
