But this added prestige and performance can come with a hefty price tag, so for some owners of these vehicles it is important to find car insurance that adequately covers their pride and joy on and off the road.
If you’re wondering who can provide insurance for your high-performance vehicle in Australia and what kind of cost you might be looking at, in this article, we’ll answer the questions:
- What is a high-performance car?
- Who insures high-performance cars?
- What are the different types of car insurance?
- What can high-performance car insurance cover?
- Are faster cars more expensive to insure?
- Is there a way to save on your car insurance premium?
- What should you consider when choosing high-performance car insurance?
What is a high-performance car?
High-performance cars are designed and constructed for speed. They are generally lightweight with large, powerful engines and strong braking and handling systems. This category of vehicle may include luxury, imported or sports car models, or standard cars with performance-enhancing modifications.
Who insures high-performance cars?
Standard insurance policies are generally accessible to most owners of high-performance vehicles, but these policies may not offer elements of cover that specifically cater for these particular cars. It may also be the case that standard insurers are reluctant to cover particular types of high-performance sports cars like Ferraris and Lamborghinis.
For those looking for extra benefits to match their high-powered vehicle, there are specialist insurance providers in Australia who may have options available, but this type of insurance can carry higher premiums.
What are the different types of car insurance?
There are four main categories of car insurance available in Australia. The first type, compulsory third party insurance, is mandatory for all drivers, while the other three – third party property damage, third party fire and theft and comprehensive car insurance – can be purchased optionally. In brief:
- Compulsory third party insurance (mandatory) protects you financially if you injure or kill somebody in an accident. In the ACT, it is now known as motor accident injuries (MAI) insurance.
- Third party property damage insurance covers you if you cause damage to someone else’s property, such as their car or home.
- Third party fire and theft insurance covers your car if it is damaged by fire or stolen, as well as damage to someone else’s property.
- Comprehensive car insurance is the most extensive form of insurance, and covers damage and theft to your car in a range of circumstances, as well as damage to others’ property.
What can high-performance car insurance cover?
High-performance car insurance will generally include the same range of benefits available with standard comprehensive policies, including coverage for accidental damage, damage to another vehicle or property, theft, repairs and towing. Depending on the specialist provider, they may also include extra benefits in their policy tailored for high-performance vehicles, such as:
Agreed value
Providers of this type of insurance can be more likely to offer agreed value rather than market value for determining the sum insured for your car. Agreed value is a fixed sum you and your insurer choose for the car, while market value is determined based on what your car would have sold for at the time of the claimable incident. With agreed value you know exactly what compensation you will get from the insurer if your car is written off. This may be beneficial when your car is valuable and you want to make sure you have enough money to replace it. However, bear in mind that many insurers will charge higher premiums if the value you agree on is higher than your car’s market value.
Choice of repairer
With a specialised high-performance insurance policy, you may be able to choose your own repairer for your car so it is more likely to be fixed or restored to your liking.
Replacement car
Some policies may offer a new replacement car in the event your vehicle is written off. However, they may only provide this benefit depending on the age of your vehicle and if it is written off within a certain period of time from when the policy begins. Other exclusions may also apply, so check with your provider.
Excess-free window or windscreen glass replacement
While many standard insurance policies will offer a level of cover for the repair or replacement of damaged windows or windscreens, specialist providers may provide this benefit excess-free. Conditions will apply depending on the provider.
Salvage rights
You may be able to retain ownership of your car if it is written off, so you can then decide whether to repair it or sell it for parts. Depending on the insurer and policy you choose, this may be available as an optional extra for an additional premium.
Modifications cover
Some specialist insurers may cover the repairs or replacement of performance-enhancing modifications on your vehicle if they are accidentally damaged or stolen. This will only apply to modifications which are legal to install, and have been declared to the insurer.
Are faster cars more expensive to insure?
As with any car, there are a range of factors that go into determining how much you will pay for insurance, such as the age, make and model of the vehicle, and the driver’s or drivers’ details and driving history. Insurers of high-performance vehicles may also look at other factors such as the power of the car’s engine and the cost of the car’s parts or any performance-enhancing modifications.
In general, from an insurer’s point of view the bigger and more powerful your engine is, the greater the risk there is of an accident occurring, and thus the higher your premium will be. If your car’s specialist parts or modifications are difficult to source or expensive to repair, then your premium will likely be higher as a result.
Because the majority of high-performance vehicles have powerful engines and expensive or unique parts or modifications, the premiums for these cars will tend to be higher than for standard vehicles. The valuable nature of these cars can also mean they are a more desirable target for thieves and vandals, and will hence usually carry a higher premium due to the increased risk.
Is there a way to save on your car insurance premium?
Depending on the policy and provider you choose, there may be ways for you to help reduce the premium of your high-performance car insurance. These may include:
Keeping your car secured
There are a number of ways you can secure your vehicle to help reduce the risk of it being stolen, and thus potentially bring down the cost of your insurance. Consider adding to your car, if it is not already equipped with these features, an alarm system, an immobiliser (a device that only allows your car to start by using the correct key or fob), a GPS tracker, and a steering wheel lock, to help ward off thieves. You could also try asking your insurer if installing any of these safety features could help lower your premiums. Parking your car in a safe and secure place when possible may also help protect your car from theft, and may lead to lower premiums compared to parking it on the street.
Taking an approved driving course
Driving a high-powered vehicle can have its dangers, so enrolling in an insurer-approved driving course, such as defensive driving, could improve your skills on the road and reduce your risk of being in an accident. Reducing your level of risk could in turn help you save on your premium.
Comparing your options
To help find the most affordable insurance policy to suit your needs and to cater for your high-performance vehicle, it may be worth comparing a range of policies both from specialist and mainstream providers.
What should you consider when choosing high-performance car insurance?
Before you take out a car insurance policy for your high-performance vehicle, thoroughly read the Product Disclosure Statement (PDS) of each policy you’re considering, so you are aware of all the terms and conditions involved, including the benefits and exclusions, and any additional excesses which may apply.
It is also important to notify your insurer of any modifications you have made to your vehicle before or shortly after you apply for a policy. If you neglect to do so, the insurer will likely be within its rights to reject your claims and cancel your insurance.
Original reporting by Elise Donandson, additional reporting by Alasdair Duncan. Cover image source: Mitch Naylor/Shutterstock.com