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There are a couple of big purchases American families may typically make. One is a house, the other is a car. Although a house usually costs a lot more money than a car, they will both cost a lot more money than your average consumer purchase. For that reason, insurance industries have sprung up to help provide these big assets with financial protection from possible damage or complete loss. The business plan of the insurance industry is relatively simple. They calculate the frequency or probability that a bad event occurs, then they calculate the resulting financial cost from the bad event. Next, they invite people who are at risk of financial losses stemming from the bad event to pay money into a pool of people who share the same risk. If anyone in the pool experiences a loss due to the defined risk, they are reimbursed for their loss. If the insurer does their probability calculations correctly, they can cover the losses, or claims, made by their customers while still making a bit of a profit for themselves.
There are more than 280 million registered vehicles in the United States and they get into more than 6 million vehicular accidents every year. The National Highway Traffic Safety Administration has estimated that the direct costs of death, bodily injury, and property damage from car accidents is almost $300 billion. That’s a big cost to the economy, but cars are a necessary component of modern life. They help ship goods, they let us commute to our jobs and they enable us to travel for recreation purposes.
Most states require vehicle owners to carry insurance in order to drive legally, and they define the minimum dollar value of the coverage you must carry. The exact details vary from state to state.
Car insurance is a contract that protects you from potential financial losses stemming from a car accident. Those losses can take the form of medical bills from injuries and the damage to your car and the property of others. In the world of auto insurance, excessive speeding while driving is a risky action. More car accidents happen with speeding cars than with cars moving more slowly. Since sports cars are typically more expensive and more powerful than standard cars, they are viewed as a higher risk category by most insurers, and they are priced higher as a result.
Let’s look at the types of insurance available to sports car owners. First, there is the property and bodily injury liability insurance. Property damage liability is the term for damage you might cause to another person’s property and bodily injury is the cost of another person’s medical bills if you have caused their injuries in a crash. In some cases, personal injury liability can also encompass a person’s lost wages. Collision insurance covers the repair damage to your own car in the event you hit something. Comprehensive insurance covers a vehicle from the cost of other damages such as storms, falling trees, theft, fire, and other risks that are essentially out of your control. Personal Injury protection is an insurance product that helps cover your own medical bills in the event you are injured in a crash. And, finally, if another driver without insurance damages your car or injures you, uninsured driver coverage will help cover your losses.
Each of these types of insurance will be available for most car owners, but be advised, not all car insurance companies may be willing to provide an expansive menu of products to the very high end of sports cars.
Some factors in the pricing of sports car insurance are the same as for every car, and some may be unique to sports cars. For example, having a safe driving record is one of the best ways to get preferred pricing on a car insurance policy. Having a safe record is usually defined as not having an at-fault accident or serious moving violation for about 3 to 5 years from the current time. The exact period of time can vary from carrier to carrier. Having good credit is also a big factor in the pricing of an insurance policy. Your place of residence and your age are also calculated into your annual premiums, as do the numbers of miles you typically drive in a year.
At the very high end of the sports car market segment (think Ferrari, Lamborghini, etc.) you will not have the same range of insurance companies to choose from. Some carriers see the high sticker prices and repair prices of high-end sports cars as too risky for their business model. High-performance auto components that are frequently used in sports cars are usually more expensive to replace and probably not produced in mass quantities. So expect to pay more for collision insurance
The average cost of full auto insurance in the United States is about $1,400 per year, give or take. By full coverage, we mean liability, collision, and comprehensive insurance for a good driver. ON average insurance for lower to mid-priced sports cars will be at least a few hundred dollars higher per year and certain other cars, like a Nissan GT-R may cost a couple of thousand dollars more. Many sports cars do not depreciate in value as quickly as most other vehicles so owners should be mindful of the book value of their vehicles and make sure that their coverage keeps up with the value of their car.
Annual Mazda MX-5 insurance rates
Some companies, such as Hagerty and Chubb, specialize in providing coverage for the sports car market. Owners of expensive sports cars may want to consider them for their insurance. Low and middle-range sports cars can usually find coverage from some name brands like All-State, Geico, and State Farm, but many smaller carriers will not have much of an appetite for insuring the expensive segment of this market.
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