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Sports Car vs Normal Car - Decoding Car Insurance

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Published on March 10, 2021. EST READ TIME: 3 MIN

Owning a car is a dream, especially if it is a stylish and eye-catching sports car. The classy vehicle is wonderful to drive and perfect for a smooth and comfortable ride. However, a sports car costs much more than a regular one, thanks to its make and model, high output engine and high-performance parts. So, it really doesn’t come as a surprise that you will have to pay a higher car insurance premium for a sports car because of its higher value and the greater risk involved. If you are planning to buy a sports car, here’s some important information about the factors affecting car insurance price or premium.

Factors affecting car insurance price or premium

Here’s why you have to pay a higher premium for sports cars:

• Insured declared value of the car: IDV or insured declared value is an important factor that determines the insurance premium of a car. A sports car is more expensive when compared to a normal car. Hence, its IDV is also higher and so is the insurance premium.

• Expensive car parts: These high-performance cars have expensive parts. In case your sports car meets with an accident, the replacement parts will cost much more than those of a normal car. Often, the replacement parts of sports cars are not easily available due to their limited production. Hence, they are more expensive to repair than a normal car.

• Risk of an accident: When you are driving a car with 400+ horsepower, the chances of meeting with an accident are high. Hence, the insurance company covers this risk by charging a higher premium for a sports car.

• Risk of theft: Sports cars are at a higher risk of theft. In case the car gets stolen, it will cost more to replace it when compared to a normal car.

• Car usage: The more you drive your sports car, the higher are the chances of meeting with an accident. Hence, the premium will also be high. However, if you may have one or more normal cars already and will use your sports car for occasional pleasure rides, you might have to pay a lower premium.

Other factors affecting car insurance premium are:

• Age: The age and driving record of a car owner is taken into account while calculating the premium amount. If you are above 25, you will have to pay a lower premium amount, when compared to less experienced and teenage drivers.

• Driving record: If you have been in one or more car accidents in the past, you will have to pay a higher premium. A history of traffic violations will also increase the premium amount.

• Geographical location: If you reside in an urban area, the chances of car accidents and theft are higher. Hence, your car insurance premium will be higher than for those living in rural areas or suburbs.

Types of car insurance

The three main types of car insurance are:

• Third-party cover: This insurance covers third-party liabilities, such as third-party injury, damage to a third-party vehicle or property, and personal accident cover.

• Own damage cover: If you already have a third-party cover, you can also take an own damage cover for better coverage. This plan saves you from financial losses in case your car suffers any damage. Own damage cover includes accidents, natural calamities, fire, and theft. You can also take add-on covers for more security.

• Comprehensive cover: A comprehensive car insurance policy offers extensive coverage and is a preferred option. It covers third-party car and property damage, damage to your own car, car theft, fire and vandalism. You can also customise your comprehensive car insurance policy with the right add-on covers.

Car insurance add-on covers:

• Zero depreciation cover

• No-claim bonus protection

• Engine and gearbox protection

• Emergency assistance cover

• Return to invoice

• Downtime protection

Although third-party insurance costs less, a comprehensive cover is a better option for sports and normal cars. It offers all-round coverage and promises better security of your priced vehicle and finances.

Conclusion:

Sports cars are smart, classy and a favourite among those looking for high-speed and high-performance vehicles for pleasure rides. So, when it comes to sports car insurance, one has to pay a higher premium to protect their fancy four-wheeler against accidents and other uncertainties. However, as stated above, your car insurance price will depend on several factors. If you need more guidance, get help from an insurance professional to choose the right coverage for your car.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

This blog has been written by 

S. Gopalakrishnan | Motor Insurance Expert | 40+ years of experience in insurance industry

A veteran in insurance industry. S. Gopalakrishnan is a name to reckon with in the field of reinsurance, he has headed the Reinsurance department and has rich experience in other fields of motor insurance. He loves to share his opinion on latest topics in the insurance industry and how he can help people in safeguarding their assets using insurance products.

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