Luxury Vehicles and Affordable Insurance: Are They Always at Odds?

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Infiniti LE Concept

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Infiniti LE Concept

It’s often assumed that luxury vehicle owners pay more for auto insurance. Why do people think this? Because it is presumed that high-end cars are the most stolen. This is in fact untrue. Because luxury cars come equipped with excellent safety features, insurance companies are more likely to charge a luxury car owner less on their premiums than the average car owner. Let’s take a look at some reasons why certain vehicle types have better insurance rates than others.

Underwriting 101

Whether it is a familiar term or not, underwriting is the name of the game. And, because those insurance agents in the home office don’t know exactly who you are or what you do, they use specific algorithms and risk profiles to generate your insurance risk.

Risk profiles examine the likelihood of an individual’s involvement in an auto accident and their claims filing. How does this affect luxury vehicle owners? It’s pretty straightforward. Insurance agencies rate their clients against a number of factors including:

  • Age
  • Gender
  • Profession
  • Marital Status
  • Make, Model and Year of Vehicle
  • Vehicle Safety Features
  • Geographical Location of Vehicle

Married adults with a stable income living in a safe neighborhood tend to get better rates because they’ve been deemed “low-risk” drivers. While this doesn’t completely cater to those who are wealthy and drive luxury vehicles, the fact of the matter is these are fairly close tendencies that match up with a high correlation to those with a more viable income.

Realistic Numbers

As a Californian, if you believe you deserve a better rate (you make a good salary and your vehicle is dependable) comparing auto insurance in California online with sites like CoverHound will help you nab the competitive rate you’re looking for. But it’s not just about rates, it’s about options, too. People who happen to be in a better car need to know that their vehicle is worth more not only to repair, but to replace as well. If your luxury vehicle is declared totaled after an accident, you could be out anywhere from $50,000 to $100,000 dollars (if not more). Theoretically, if you were only paying $2,000 per year to insure a vehicle that costs $100,000 to replace if totaled, well, some would say you’re getting quite the bargain.

Options

Finally, you have to remember what it is you are actually getting with your coverage plan. While it might be a little different for every insurer, those with high-quality vehicles and luxury auto policies will oftentimes have much better coverage. Instead of only getting bare bones, you could have all of the bells and whistles including towing, brand new auto part repair, rental reimbursement and even new car replacement on your high-end vehicles. Whether you pay a few dollars more or not shouldn’t matter; what matters is the extensive coverage you’re getting for only a few dollars more.

When you’re thinking about finding the right auto policy for your luxury vehicle, you can’t just consider bottom dollar. Everyone is price conscious in the insurance field and you should be as well. However, when it comes to actually pricing the insurance quote that you’ve received (and you should receive many) you’ll want to be sure you’re comparing both prices and coverage. After all, why would you go with some carrier to save ten bucks, if it means actually putting yourself in a less advantageous position overall and with significantly worse coverage? Make sure to obtain solid quotes and then view which one makes the most sense for you with both price and coverage in mind.

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