Have you ever heard of a car that is uninsurable? While rare, there are instances where a vehicle is not worth the risk for the insurance companies involved. There are dozens of different reasons why this may happen.
Sometimes, a vehicle may ironically be considered too high value to insure. Other times, the car has a problem that keeps it from being insured. Please read below to better understand what it takes to create (intentionally or not) an uninsurable vehicle.
Why Insurance Companies Refuse Certain Cars
To run at peak efficiency, insurance companies must constantly run risk assessments. In other words, when they come across a car that is considered high risk to insure, they will be less likely to approve any application for coverage.
So, what makes a car risky in the eyes of an insurance company? There are a few primary reasons why insurance companies may deem the risk too high. For example, the value of the car (and thus potential replacement cost) is too high, or the vehicle could be considered a danger on the road.
Reasons Cars Become Uninsurable
While the two examples above are the most common, there are actually a variety of reasons why insurance companies may not opt to cover a vehicle. Other potential causes include:
- Altered/modified vehicles
- Antiques/rare finds
- Exhibition cars
- Exotic or high-value cars
- Grey market cars (cars imported into the US)
- High-weight cars
This is by no means an exhaustive list of reasons why a car may be deemed uninsurable. The simple truth is that humanity is quite creative when it comes to developing new vehicles, and it does take time for an insurance company to establish policies to match.
Technology and the Uninsurable
There is one final reason why an insurance company may opt to avoid insuring a car. These days, self-driving tech is becoming more readily available. However, it has not yet been perfected. Until such a time when self-driving vehicles are deemed safer than human-driven cars, it is unlikely that any vehicle based on this tech will be considered insurable. Keep that in mind before splurging on a shiny piece of new technology.