Monthly Archives: May 2017

Super Expensive to Insure

Cranking down the highway at 140 miles per hour behind the wheel of your Koenigsegg Agera R sounds exciting to just about anyone but before you drain your bank account and head to the dealership, be aware of the true costs of these cars. Exotic super cars are not only expensive to buy but expensive to own. Insurance premiums and maintenance costs can add thousands of dollars a year to your ownership costs.

Super Cars Are Super Expensive

Buying an exotic car is not for most of us. These cars cost more than many people make in their entire working life. We are not talking about run of the mill Porches or Ferraris but truly exotic vehicles. They are built in limited numbers, use extremely expensive materials and are hand built putting them out of reach for the majority of drivers.

Just how far out of reach? A Bugatti Veyron Supersport has a 16 cylinder engine that will push it over 200 mph and it will go 0-60 in 2.9 seconds. This car costs a staggering $2.6 million dollars. The Koenigsegg Agera R is another example of a truly rare car. It’s 1115 HP V-8 will hit 60 mph in 2.9 seconds as well but cost a mere $1.7 million.

So what does it cost to insurance and run one of these exotic cars? Tons of money.

Insurance Costs

Insuring your million-dollar vehicle can cost plenty. In the majority of cases super cars are insured by specialty insurers. Mainstream insurers like Progressive or State Farm have limits on the value of cars they will insure and most will not touch a million dollar vehicle.

Collector car and other specialty insurers such as Chub and Chartis issue policies called agreed value. Agreed value policies let the vehicle owner set the limit on the value of the car. In the case of a total loss, they are paid 100 percent of the agreed value. Exotic cars depreciate quickly and this type of insurance makes sure you recover full value of the car if it is totaled or stolen.

So what is the premium on an exotic car?

According to Autoblog, the most expensive car to insure is the most expensive car to buy. Insurance costs for a Bugatti Veyron will run roughly $50,000 per year. The U.S Census Bureau found that the median household income in 2010 was $49,445 so if you plan on buying a Veyron be prepared to fork up more than most households are living on, just for insurance.

Insurance is just one expense that you will have to deal with; maintenance is where the real money will be spent.

Lets Helps Drivers Save on Insurance

Drivers will soon have a new incentive for obeying speed limits, avoiding excessive braking and using turn signals. While some of us might not like the idea of having our driving habits monitored by an onboard spying device, the prospect of paying less for car insurance might just change our attitudes.  And whether we like them or not, computerized tracking systems that grade us on our driving style will soon be as commonplace as the now-ubiquitous cell phone.

Sprint’s Emerging Solutions Group has launched a system that allows auto insurance companies to assess pricing based on customer driving habits, rather than arbitrary information like where they live or their credit score.  Called ‘Usage Based Insurance’, or UBI, it allows insurers to customize pricing to each driver, giving discounts to good drivers and charging more to those who speed or frequently slam on their brakes.

The device plugs into a car’s diagnostic system and analyzes gathered data with scoring software that rates driver safety.  It then transmits the information via a wireless signal to the insurance firms. Sprint says it’s a win-win situation for both insurers and drivers – good drivers, that is.  Insurance companies will increase their bottom line, reduce costs and better assess the risk that drivers pose. Good drivers will save on insurance.

Insurers can also offer additional programs for policyholders, such as using the device to monitor vehicle health, fuel efficiency, service needs and location.

Plans are in place to expand the monitoring program to include financial institutions.  In this application, the device will be used to prevent drivers from starting their cars if they’re late on their payments. It will also be able to locate and lock vehicles that are being repossessed.

Car Insurance Rates on Skyrocketing

Having a few drinks after work and then getting in your car to drive home may not seem like a big deal but it can have a huge impact on your car insurance premiums if you are pulled over and found to be driving under the influence (DUI). A DUI is one of the most damaging things that can happen to both your driving record and your insurance premium.

Driving under the influence happens more often than most people would think. According to the National Highway Traffic Safety Administration (NHTSA), in 2010 there was an alcohol related death in the U.S every 51 minutes. Over 1.41 million drivers were arrested in 2010 for driving under the influence of alcohol or narcotics according to the FBI.

While it is possible that your insurer may not find out about your DUI immediately, eventually it will come to light. Insurers do not check your driving record every year, which may leave your DUI undetected unless the state you are in requires notification. However, once an insurer becomes aware of a DUI you can expect skyrocketing rates or even cancellation of coverage.

The laws regarding DUI’s and auto insurance will vary by state. Each state sets their own blood alcohol limits as well as policies regarding notification of the drivers insurance company and whether the driver must seek coverage in a high-risk pool.

Many states require drivers to obtain a SR-22 form from their auto insurer which will immediately bring your infraction to the attention of your insurance company.

The SR-22 is basically a certificate of financial responsibility that the state requires to get your license reinstated.

Each state will notify drivers who need to carry a SR-22 what the minimum car insurance limits they must have to get their license back. When the proper coverage is purchased the insurer will file the SR-22 with the state verifying that you have insurance coverage.

Not all insurance companies even offer SR-22 coverage so you may be cancelled and have to find a new insurer.

Once filed you will need to carry a SR-22 for a certain number of years. It will vary by state but in most cases it is at least 3 years and often runs to five years. If you cancel your insurance or are dropped due to non-payment your insurer will immediately notify the state and your license and/or vehicle registration will be suspended.