Underinsurance: The Hidden Risk for High-Value Car Owners

Tysers Insurance Brokers |

Owning a prestige vehicle is a statement of style, performance, and investment. But when it comes to insurance, many high-value car owners unknowingly fall into a costly trap: underinsurance.

In this post, we’ll explore what underinsurance is, why it’s a growing issue among supercar owners, and how bespoke insurance solutions can protect your investment properly.

 

What is underinsurance?

Underinsurance occurs when your vehicle is insured for less than its true value. In the event of a claim, whether due to theft, damage, or total loss, you may receive a payout that doesn’t reflect the actual worth of your car.

This is especially common with prestige vehicles, where market values fluctuate, modifications add value, and standard policies often fail to keep up.

 

Why it’s a hidden risk of underinsurance for supercar owners

Prestige car owners are particularly vulnerable to underinsurance due to:

  • Rapid appreciation or depreciation of rare or limited-edition models
  • Undeclared modifications that increase the car’s value
  • Generic market value policies that don’t reflect bespoke features
  • Infrequent valuations that leave policies outdated

Many owners assume their insurer has valued the car correctly, but unless you’ve requested an agreed value policy, that may not be the case.

 

Real-world example

Imagine your supercar is insured for £150,000, but its current market value is £200,000 due to rarity and upgrades. If it’s written off, you could lose £50,000 simply because your policy wasn’t updated due to underinsurance.

 

How to avoid underinsurance

  • Request an Agreed Value Policy
    This ensures your insurer pays out a pre-agreed amount, regardless of market fluctuations.
  • Schedule Regular Valuations
    Especially after modifications or market changes.
  • Disclose All Enhancements
    From performance upgrades to cosmetic changes—everything affects value.
  • Work with a Specialist Broker
    A broker who understands prestige vehicles can tailor your policy to reflect true worth.

 

Why bespoke insurance matters

Unlike mainstream insurers, bespoke brokers offer:

  • Agreed value cover tailored to your car’s unique profile
  • Modification-inclusive policies
  • Expert valuations from specialists in high-value assets
  • Portfolio bundling to protect your car alongside other luxury items

 

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