If you think finding cheap car insurance rates for your vehicle is tough, imagine what the owner of a new Huayra will go through when the $1.4 million supercar blows into the U.S. market later this year.
Named after an ancient Andean god of wind, the Huayra is the latest from Italian manufacturer Pagani Automobili S.p.A. (It's pronounced wai-ruh.)
The car is both a technological marvel and work of art. Powered by a twin-turbo, 12-cylinder engine with more than 700 horsepower and 800 foot-pounds of torque, the Huayra can go from zero to 100 in three seconds and reach a top speed of 230 mph. It's the lightest sports car in its class, weighing just shy of 3,000 pounds; indeed, with its sleek gull-wing design, the Huayra looks ready for flight.
So how do you insure a car with a bigger price tag than most homes?
"Most insurers wouldn't touch it," says Jim Grundy Jr., president of Grundy Insurance. "You need an underwriter that understands the nature of the beast."
Carved from unobtanium
Companies like Grundy specialize in exotic and collector automobile insurance. In the last year, Grundy says his company insured some 500 vehicles worth more than $1 million each. Not all are exotic cars; some are valuable antiques and classic vehicles.
The priciest portion of a car insurance policy for an exotic vehicle is collision coverage because repairs and parts are so expensive, Grundy says. The Huayra's monocoque chassis--the car's one-piece structural frame--is made from carbon and titanium.
"I suspect that there are very few, if any, repair shops in the United States qualified to work on a carbon-titanium vehicle, with the exception of a few race car shops," Grundy says.
After exotic cars are in wrecks, manufacturers in many cases require thorough X-rays of vehicles before releasing any repair parts. The X-ray can detect damage invisible to the eye that could threaten the vehicle's structural integrity. Even minor damage can result in repair bills running into the hundreds of thousands of dollars. Only three such X-ray facilities operate in the United States--one each in Florida, California and New York, Grundy says. Ferrari requires its cars to be X-rayed by a facility in London.
You'll actually drive it? That'll be extra
Collector vehicles are categorized in one of three classes for auto insurance quotes, Grundy says:
- Daily use. The car is used as a primary means of transportation, an impractical category for a supercar.
- Secondary use. The car is driven occasionally or used as a backup vehicle.
- Collector use. The car is driven for shows and kept for a hobby.
The annual premiums for a standalone $1 million exotic car would be about $14,000 as a collector car, $17,000 to $18,000 as a secondary vehicle and $20,000 to $22,000 for daily use, Grundy says.
Of course, those premiums depend on the applicant having a near-spotless driving record. Otherwise, costs likely will be higher.
Got a DUI? Forget it.
Grundy tells of a Hollywood star who owned five exotic cars and racked up four speeding tickets in quick succession. The insurer then would not let him drive the vehicles for three years. "He paid $100,000 a year in premiums, and nobody drove the cars because they were his personal toys," he says.
How do you get the premium down?
Premiums fall dramatically if the car is part of a collection of vehicles, dropping as low as $2,500 a year per vehicle, Grundy says. A good security system might save you 10 percent to 15 percent on the comprehensive portion of the car insurance policy, which covers losses from causes other than traffic accidents, such as theft, vandalism and fire.
Pagani announced in February it would begin selling the Huayra through a dealer network here later this year. Its earlier supercar model, the Zonda, a hit among European car aficionados, was not available for sale in the United States.
If you're among the lucky few car enthusiasts with a million or two bucks to spare, Grundy offers this advice: Get a firm car insurance premium quote before you buy the car.