Do you ever wonder if James Bond thought about the insurance required for his Aston Martin? The way he drives, we’d love to see what those premiums would look like.
The cost to insure a luxury vehicle in Canada can cost two to three times more than a standard vehicle. This can depend on a number of factors including driving records, make and model and the location of the insured vehicle.
Exotic and luxury vehicles can present some unique challenges when trying to secure insurance coverage, which is why working with a specialist is important. Our Signature by Acera Insurance advisors break down what drives your luxury vehicle premiums so you can make informed decisions about your insurance coverage.
Understanding what impacts your insurance
If you are purchasing a vehicle of this type, you are investing in high performance, advanced technology, superior comfort and premium materials, which leads to a high price point. Typically, if your vehicle is worth more than $200,000, it will likely be defined as a luxury vehicle by most insurers.
Because these vehicles are made with more advanced technologies, rare materials and specialized parts, they are also more costly to repair and replace in the event of a claim. Depending on the vehicle, parts may need to be imported, and you may also need to have any work done by a specialized mechanic or a manufacturer-certified service centre.
Luxury vehicles are also increased targets for theft due to their desirability and high resale value. They may be stolen for parts or to be resold to unsuspecting buyers, which makes them more expensive to insure.
Insurance eligibility and out-of-province usage
It’s important to be aware that there are specific eligibility requirements for luxury vehicles that are tied to their insurance coverage. These can include:
- Residency requirements: Typically, your primary residence must be in the province where the policy is issued. For instance, if you are a resident of British Columbia and are purchasing a vehicle in Alberta for tax or cost reasons, you may not meet the eligibility criteria.
- Time out of province: Alberta residents have restrictions for how long they can be outside of the province. Exceeding this may affect your insurance eligibility.
There have also been shifting trends in the Alberta insurance markets – with more clients wanting to purchase luxury or exotic vehicles to use in other provinces with milder climates. This is causing insurers to be more cautious with these requests, making it more difficult to find coverage.
Determining the complex underwriting needs
The good news is, that if you aren’t using your sports car as your daily commute vehicle, there are some opportunities to save on insurance. If you plan to limit your driving to the summer months, weekends and special occasions, then it would be a good idea to talk to your Signature by Acera Insurance advisor about a limited-use policy.
It’s important to note that luxury and exotic vehicles can be hard to place due to limited market capacity. This can result in slower turnaround times from insurers than you may be used to experiencing — especially if you do not have a clean driving record.
Working with a specialized advisor who understands the luxury automobile marketplace is key to ensuring you have the correct policy that meets your needs.
If you are considering purchasing a luxury vehicle, reach out to our Signature by Acera Insurance team with the details about the vehicle(s) you’re interested in so that they can start the quote process early and avoid any gaps in coverage.