Cover for lavish motors can cost 20 times more than a normal ride, but compared to the value of the car it's actually a good deal
Insurance on high-performance supercars 'relatively cheap' in the UAE
Owning a luxury, high-performance vehicle may come with a hefty price tag, but the cost of insuring your supercar in the UAE is relatively cheap when compared to regular models.
Fully comprehensive insurance in the UAE for luxury vehicles an, on average, range from Dh20,010 a year for a Ferrari California to Dh8,474 for a Bentley Bentayga, according to the regional comparison website yallacompare.
While the price for insurance is high, and covers own damage as well as third-party liability, it compares to the overall car’s worth much the same as regular models.
“Insurance for supercars is sold at anywhere between 0.5 per cent to 3 per cent of the car’s worth so, in one sense, supercar insurance is actually quite good value,” said Jonathan Rawling, the chief financial officer of yallacompare.
Mr Rawling said that for older vehicles, particularly 4x4s, premiums for fully comprehensive policies can cost much more relative to the value of the car. “You could be paying up to 10 per cent of the car’s value to comprehensively insure your 2008 Mitsubishi Pajero,” he said, giving an example.
While insuring a convertible supercars might be more pricey in overall insurance costs, it can offer better value. Models such as the Dh575,000 Maserati GranCabrio, have insurance rates averaging around Dh20,000 or 3 per cent of the car's value. Cover for the UAE’s favourite luxury 4x4, the Mercedes-Benz G63 AMG, can amount to Dh10,000, or about 1.7 per cent of the car’s value.
The Middle East comparison website noted supercar insurance in the UAE is also reasonably priced when compared internationally.
In the US, the average costs for New York state-required minimum insurance coverage on a Lamborgini Huracan is US$5,232 (Dh19,213). This requires that the car is only driven up to 15,000 miles a year, is accident-free for five years, has good credit and an anti-theft device fitted.
Companies calculate the premium to ensure there is enough capital to pay own damage and third-party claims (the other car and people involved in an accident). To do this, insurers take into account a variety of factors, including a driver’s age, nationality, projected costs of repairs and medical inflation. “In theory, insurers are using years of data and actuarial analysis to come up with prices,” Mr Rawlings said.
Insurers begin with a base rate, which is a percentage of the vehicle’s value and applies discounts based on the customer’s specific circumstances. Mr Rawling added: “For example, the base rate might be ‘loaded’ for a younger driver and might be ‘discounted’ based on a history of no claims.”