- Generally, all prestige car insurance policies are a type of comprehensive car insurance.
- But they are different in the sense that they come with specific features that are particularly tailored to valuable, high-performance unique cars.
- Whether you own an Aston Martin, Bentley, Porsche or another luxury brand, it is essential you find the right insurance for you and your car.
For some, the definition of utmost happiness is spending a chunk of their hard-earned money on a supercar or luxury vehicle that reflects and demonstrates a passion for the finer things in life.
And what better place to glamour-cruise than on the highways of the UAE?
The cash is on the table, your graceful dream car is waiting for you at the showroom, and you can already visualize the vast, sunny, palm-tree-laden roads of the UAE as your thrilling playground. But in the back of your mind, you know you have a few things to consider before shelling out your precious cash, the most critical being car insurance.
High-end vehicles are an entirely different ball game. A car insurance premium for a new high-end vehicle (AED 300,000 and more) will be a recurring annual charge for as long as you own the car. So in reality, retail cost is not the only factor to consider before making your expensive decision.
You may have to pay over the odds into the protection of your prestige car if you don’t thoroughly research your options. But the right insurance policy will procure peace of mind at better value for money.
Why are prestige car insurances generally more expensive?
Sports cars and off-road SUVs are the 2 categories of vehicles that are the most expensive regarding insurance policies. Vehicles of this nature tend to be high in value and extremely powerful. Therefore, when they’re involved in an accident, the costs of repair can be very hefty. Many of those vehicles are also at higher risk of theft. In general, high-value cars require special car insurance to ensure that they are financially protected should anything happen.
Understanding comprehensive vs. third-party insurance policies for prestige cars
Generally, when it comes to choosing between comprehensive or third party car insurance, it’s a good idea to ask yourself whether you want the full package or just the essentials, which is less expensive.
- Comprehensive car insurance: The full package where all aspects of an accident are covered.
- Third party car insurance: The all-important liability insurance that will only contribute towards third-party vehicle damage, hospital bills, or infrastructure repair rather than damage to your car.
But buying insurance for a prestige or exotic vehicle can be very different than purchasing insurance for a standard car. In most cases, it is recommended to buy comprehensive insurance coverage when your car is new and expensive.
But it all depends how you intend to use your luxury car, how it is going to be stored, and how often you’re going to drive it that dictates which insurance you should go for.
If your prestige car is an older model of significantly decreased value or isn’t used very frequently, then third party car insurance can be a good option for you.
But here are a few things to consider in the case of a high-end vehicle insurance premium:
- The right type of insurance is particularly important for a luxury vehicle
- When you want to take care of your dream car, repair it to the highest standard and restore it to its luxurious condition when need be, you must know that standard insurance policies usually do not give you the option to choose your own garage when you need to make a claim. So it is important that your insurance policy allows for an agency repair (the official dealership’s repair shop) or send it back to the original factory for more extensive repairs when there is no agency in the UAE that can repair the car.
- It’s not necessarily a good idea to choose the cheapest car insurance, because the price of being underinsured may end up costing you much more than what you’ve been trying to save on your policy.
- Insuring luxury vehicles is indeed more expensive than insuring a standard car, and that’s because the claims tend to be more expensive and it costs a lot more to replace a luxury vehicle than it is to replace a standard car.
Ways that can save you money:
- Install safety and security devices in your car to help reduce your premium and save money on your insurance
- If you pay higher excess right now, it will pay off later by lowering car insurance costs.
In terms of car insurance, luxury is not created equal
For example, buying a luxury sedan versus a luxury sports car (in other terms, high-performance vehicles known as HPV) makes a big difference on insurance premium cost. Insuring a luxury sports car such as a top-of-the-line Ferrari or a Lamborghini can be up to 40% more expensive than insuring a high-value vehicle (HVV) like a Bentley or a Rolls Royce.
According to Arabianbusiness.com, a new survey has revealed that fully insuring a supercar in the UAE, depending on its value, costs somewhere between AED 8,000 and AED 20,000, with convertible supercars setting you back at the heftier end of the insurance price-tag spectrum. For example, fully comprehensive insurance for the Maserati GranCabrio comes in at an average of AED 19,095, according to Arabianbusiness.com, while fully comprehensive cover for the Ferrari California costs an average of AED 20,010.
As for HVVs, full cover for a Bentley starts from AED 8,500 which is around 0.65% of the car’s value. Depending on the model, it can also start from 0.87% of the car’s value (AED 9,500).
New tariffs introduced by the UAE Insurance policy
Since last year, the UAE Insurance Authority introduced new tariffs, stating that insurers could charge no more than 5% of the car’s value for a fully comprehensive policy.
Is it generally cheaper to insure second-hand luxury cars?
Used luxury cars are generally much more affordable, particularly in the UAE, where a car value can drop by 20% in the first year of ownership and 15% each year after that. And when it comes to luxury cars, the depreciation value is even higher.
Hopefully having read the above, you now have a better idea of performance and high-value car insurance. However, we do know that it is difficult to find specific quotes for sports, sedan or any prestige and exotic cars online. At Aqeed, we can help you carefully compare policies and find a high-value car insurance that suits your situation and works with your specific requirements. Please send us your information and documents such as your driving license, vehicle registration, and resident ID to firstname.lastname@example.org, and we shall be calling back to give you a quote.