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Pam's Insurance Site

When I bought my first house, I was already going into a lot of debt. I didn't have the money to seriously insure it, so I bought only the bare minimum without consulting an insurance professional. That was a big mistake on my part. It could have turned out alright. That is, if my house hadn't been in the path of a huge storm. Huge gale winds knocked a tree down straight through my roof. My house was practically destroyed, and my minimal policy didn't cover nearly enough. I spent years and years trying to get myself out of that financial mess. Since then, I have always been very cautious in learning about insurance and talking to the real professionals.

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Limitations Of Specialty Insurance For Luxury Cars

If you have a luxury or exotic car, you can either buy its auto insurance from regular auto insurance companies or from auto insurers specialized in luxury car insurance coverage. Here are some of the drawbacks you may experience when you opt for the specialty coverage route:

They Tend to Have Age Restrictions

Most specialty insurance companies that handle luxury cars have strict or lower age restrictions for their policies. To understand why this is the case, you need to understand that even regular auto insurance companies use age as a factor in rate determination. This is because young drivers have a high risk of accidents. Since frequent accidents in luxury cars can lead to thousands of dollars in damages, specialty luxury auto insurances avoid such losses by raising age limits for their drivers. For example, you may find that the policies are only sold to those over the age of 25.

They Need Proof Of Secure Storage

Luxury cars are pricey; some of them can run into hundreds of dollars to buy or replace. Therefore, it makes sense that your luxury car insurer will need to confirm that you have a secure storage place for the car before selling you coverage. In some cases, you may be sold coverage without proof of secure storage and anti-theft devices, but then you will have to pay astronomical rates to cover the risk.

They Have Low Mileage Limits

The more you drive, the more you expose yourself to road risks. This means that high annual mileage exposes you not only to more injuries but also to higher frequencies of car damages. This is why many auto insurance companies provide discounts for their clients who maintain low annual mileage (limits vary by the insurer). When it comes to specialty luxury insurance, the annual limits are typically lower than those for regular cars. In fact, you may even be required to have another car for your regular use.

They Have Strict Modification Restrictions

Lastly, specialty auto insurance coverage companies also have strict requirements for modifications of insured cars. Again, this is not so surprising given that even regular cars should not be modified without insurer notification. It is just that the luxury car insurers have stricter requirements given that the alterations make such cars even riskier and more expensive than their stock versions.

As you can see, there are a few challenges you may face when you go the specialty route. Therefore if you have an exotic car to insure, talk to your personal insurance agents for coverage options they may have.