Insuring expensive cars in the Philippines: All you need to know

Car insurance is an integral part of a car owner's journey which must not be considered an expense but an investment that’ll provide financial assistance at the time of need.

It is a known fact that the cost of car insurance varies significantly depending on the type of car. For instance, while a standard car’s insurance policy may seem manageable, insuring a high-end luxury car often comes with a hefty price. We have already talked about cars with the cheapest insurance in the Philippines and now it is time to look at the other side of the spectrum.

In this article, we will be shedding light on the intricacies of expensive car insurance in the Philippines including the factors that influence premium rates and exploring how much it costs to insure luxury vehicles.

But before we get started, let us first get an overview of the car insurance market in the Philippines, starting with its meaning.

Understanding car insurance in the Philippines

Car insurance is mandatory for all vehicle owners in the Philippines. The auto insurance market in the country is broadly divided into two categories - compulsory and comprehensive insurance. The former is Compulsory Third-Party Liability (CTPL) and covers damages caused to third parties in case of an accident. However, for comprehensive coverage, many car owners opt for additional policies that cover theft, fire, and other damages.

Note, when it comes to insuring luxury cars, comprehensive coverage is often essential to protect the significant investment.

Also Read: Understanding car insurance cost in the Philippines in 2024

Factors influencing car insurance cost

Car insurance cost is influenced by several factors, especially when it comes to expensive/luxury cars. A car owner needs to understand these factors as it can help them make an informed decision about their insurance policies. Let’s check out what they are -

Car make & model: The brand and model of a car significantly impact insurance costs. Luxury brands such as Mercedes-Benz, BMW, and Audi typically have higher insurance premiums due to the high cost of repairs and replacement parts.

Car age: Newer cars generally have higher insurance premiums because their service is more expensive, not to forget the part replacement cost. Older luxury cars might have slightly lower premiums, but they can still be costly to insure due to the difficulty of sourcing parts.

Driver’s age & experience: Young drivers or those with little or no experience tend to experience higher insurance premiums. Why? Well, that’s because insurers consider these drivers as high risk, especially if they are driving high-performance vehicles.

Location: The area where the car is primarily driven and parked also affects insurance rates. Areas with higher crime rates or higher traffic congestion may lead to higher premiums.

Driving history: A clean driving record can help lower insurance premiums, while a history of accidents or traffic violations can increase the cost of insurance.

Coverage type: The extent of coverage chosen by the car owner will directly impact the cost. Comprehensive policies that cover a wide range of incidents will be more expensive than basic coverage.

In addition, a few factors contribute to a car's high insurance premium costs. Yes, they are the ones that play a major role in influencing expensive/luxury insurance costs.

Car’s value: Expensive cars have higher market values, which means insurers will have to pay more in case of theft or total damage.

Repair costs: Luxury cars often require specialized parts and services, which are costlier than those for regular vehicles.

Risk profile: High-performance cars are perceived to be at a higher risk for accidents, leading to higher premiums.

Importance of comprehensive coverage for expensive cars

For owners of luxury cars, comprehensive insurance is not just a recommendation—it’s a necessity. Given the high value and cost of repairs for luxury vehicles, having sufficient
coverage is crucial to protect against financial loss. Comprehensive policies cover -

Theft: Luxury cars are often targets for theft. Comprehensive insurance covers the cost of replacing the stolen vehicle.

Accidents: Whether it’s a minor fender-bender or a major collision, comprehensive coverage ensures that repair costs are covered.

Natural Disasters: The Philippines is prone to natural disasters like typhoons and floods. Comprehensive policies cover damages caused by such events.

Vandalism: Acts of vandalism, which can be costly to repair, are covered under comprehensive insurance.

Fire: Damages caused by fire, whether accidental or due to an external event, are included in comprehensive policies.

Cost of insuring expensive/luxury cars

The cost of insuring luxury cars in the Philippines can vary widely. As per sources, the premium for luxury car insurance ranges between PHP 50,000 to PHP 200,000 per year, depending on several factors (as mentioned above). Let’s check out a few options -

Mercedes-Benz SL-Class 350

Price: PHP 6.7 million
Approx. insurance: PHP 138,115 to PHP 203,645 per year (making it the most expensive option on the list)

The two-seater Mercedes-Benz is known for its stylish looks and is an ideal choice to experience an open-air journey in the countryside and city. Its 3.5-litre gas engine produces 302 hp of power. The car offers a top speed of 250 kmph, making it a pretty fast option.

BMW 7 Series 730i

Price: PHP 5,990,000
Approx. insurance: PHP 120,018 to PHP 170,033

The BMW 7 Series 730i is a sporty sedan that is packed with luxury which is impossible to ignore. It is packed with several smart features including an innovative freestanding information display, a 7-inch control panel table, and much more. As for performance, the 7 Series 730i generates 265 hp and 400 Nm of torque.

Audi A8 L

Price: PHP 8.99 million
Approx. insurance: PHP 130,000 to PHP 160,000

The Audi A8 L is a complete package, the German carmaker has loaded it with comfort, luxury, and innovation. Powering the A8 L is a 3.0-litre turbo unit making a maximum power output of 258 hp along with a peak torque of 580 Nm. The car cabin screams luxury with inclusions like leather upholstery, wireless Bluetooth, 4G LTE WiFi, and more

Land Rover Range Rover Sport

Price: PHP 13.49 - PHP 14.79 million
Approx. insurance: PHP 176,997

The Land Rover Range Rover Sport is one of the most expensive cars to insure in the Philippines. It packs a superb engine, a sporty exterior, and an ultra-comfy cabin which passengers enjoy a lot.

Mercedes-Benz E200

Price: Starts at PHP 4,390,000
Insurance range: PHP 108,204 to PHP 153,209

The super stylish and sporty Mercedes-Benz E200 is powered by a 2.0-litre turbo mill which is paired to a 9-speed automatic transmission system. This fuel-efficient luxury sedan features an intuitively designed cockpit that makes sure the driver and passenger are comfortable.

BMW X5 xDrive30d

Price: PHP 8.89 million
Approx insurance: PHP 109,241 to PHP 141,538

The BMW X5 is among the best-selling luxury crossovers in the Philippines. The X5 xDrive30d is equipped with a capable mill that generates up to 265 hp of power and 620 Nm of torque. The SUV is equipped with an infotainment system, front & rear speakers, and a roomy interior.

Lexus RC F

Price: PHP 8,888,000
Approx insurance: PHP 106,904 to PHP 151,358

The Lexus RC F is the brand’s most expensive model to insure. The four-seater luxury car is powered by a 5.0-litre V8 unit making a maximum power output of 471 hp and a peak torque of 530 Nm. Paired with an 8-speed automatic transmission, the setup allows the Lexus to go from 0 to 100 kmph in just 4.5 seconds.

Jaguar F-Pace

Price: PHP 6.19 million
Approx insurance: PHP 94,740 to PHP 122,667

The Jaguar F-Pace is the brand's first crossover SUV in the category which combines superb driving comfort and pure performance. In the Philippines, this luxurious family car is offered in two engine options - 3.0-litre hybrid and 5.0-litre gasoline engine. This five-seater SUV features a lavish interior fitted with a two-zone climate control system, a 10-way electric front seat, and more.

Also Read: 15 cars that are cheaper to insure in the Philippines

Ways to reduce car insurance cost

From the above car insurance cost detailing, it is quite clear that luxury car insurance is quite expensive. However, there are ways a car owner can potentially reduce the premiums. Let’s take a look at the tips -

Install security features: One of the most common tips is to add several security features in the car like alarms, immobilizers, and GPS tracking. This will reduce the risk of theft, thus lowering the premiums.

Safe driving: Maintaining a clean driving record can qualify you for discounts from insurance providers.

Bundling policies: Some insurers offer discounts if you bundle car insurance with other policies like home insurance.

Compare insurance providers: It’s crucial to shop around and compare quotes from different insurance companies. Each insurer has its own method of calculating premiums, and rates can vary significantly.

Limit coverage options: It is advisable for drivers to carefully assess their coverage needs. While comprehensive coverage is advisable for luxury cars, car owners may be able to adjust certain aspects of the policy to reduce costs.

Bottom line

It is a fact that insuring luxury cars in the Philippines can be quite costly due to their high market value, expensive parts, and higher risk profiles. Therefore, it becomes important to understand the factors that influence these costs, and exploring comprehensive coverage options can help car owners make informed decisions.

Also Read: Top reasons to get your car insured in the Philippines