A few evenings ago, something very unfortunate happened in South Beach. Someone ran into Kris Singh’s Pagani Huayra. Kris posted a photo of it along with the story explaining the accident soon after on Instagram. I have met Kris several times and always enjoy his company. His $1.8 million + hypercar was definitely something to behold.
As the photos show, the car was damaged around the rear right wheel. The quarter panels and decklid are a single huge piece of carbon fiber, exposed carbon fiber in this particular case. The rear suspension and hub were damaged as well.
This prompted a few of my friends to call asking what happens in the event that you are the at fault party in a crash like this. I dealt with insurance companies daily with Supercar Rentals and on behalf of clients at Motorcars of Georgia. Here are some recommended insurers of exotic cars.
So what happens when you run your $5000 Scion into a $2 million dollar car? Have you heard insurance companies advertising “minimum coverage for minimum budgets?” That is where that minimum part really matters.
When you read your disclosure documents you will see three pertinent numbers. They will generally be displayed as something like 300/100/100. That means you have $300k liability coverage, $100k for bodily injury, and $100k for physical damage. That’s right, most insurance companies cap physical damage coverage at $100k. Some go higher, particularly those that insure exotics themselves. The minimum that you are required to carry in most states is $25,000.
This is just me guessing but I think the Huayra damage is $250-300k. If you have a cap of $100k on your policy, this is what happens.
- Your insurance company will deny liability for the claim.
- They know they will lose but this will require Kris, in this case, to call his own insurance and file it under his Uninsured/Underinsured Motorist Coverage.
- They will sue/arbitrate with the at fault insurance and win.
- The lawsuit will name both the driver and their insurance company.
- The at fault insurance will pay up to the limit of physical damage coverage.
- The driver is responsible for the difference. In this case that is probably going to be $200,000 or more.
It is obviously unfortunate that people can be subject to such liability but this means that you need to be careful when you read your insurance coverage and when you are driving around expensive cars. It doesn’t have to be a Pagani, Bugatti, or Koenigsegg for this to matter. There are thousands of cars sold each year that are over $100k. Total one of these and it can become a bad day. Drive safe!