Every vehicle needs to carry some level of insurance to be allowed to operate on Australian roads. However, coverage may work differently – and can be more costly – for imported cars compared to that of their regular counterparts.
What is considered an imported car in Australia?
Technically, almost all vehicles currently sold in Australia are brought in from abroad since the country’s last car manufacturing plant shut down in 2017. But in an insurance context, according to financial comparison website Canstar, an “imported car… generally refers to a car that has been purchased from overseas sellers and shipped into Australia” as opposed to those bought from a domestic dealership.
Insurance companies often categorise imported vehicles into two types: grey imports or those from manufacturers that do not typically ship units to Australia and prestige vehicles, which can include luxury and sports cars.
Generally, owners of imported vehicles in Australia can obtain coverage in two ways:
1. Through standard car insurance providers
Many auto insurance companies offer comprehensive cover for imported cars as long as these vehicles meet certain specifications. Some provide separate policies for vintage and classic cars, which can also cover prestige vehicles.
2. Through specialist insurers
Specialist insurers cater specifically to owners of imported cars. As such, these providers also tend to be more experienced in providing coverage for specialty vehicles.
One important factor that car owners should bear in mind is that regardless of which provider they go to, premiums of imported vehicles will be higher than those for standard units.
Financial comparison website Finder laid down the differences in how each group provides coverage for imported vehicles.
Choice of repairer: Standard insurers typically have a list of workshops car owners can choose from, while specialists allow policyholders to work with repairers of their choice. The latter group also knows which workshops are best for specialty or imported cars.
Salvage rights: Conventional car insurers often lay claim to damaged parts and vehicles, while specialist providers let drivers retain damaged and potentially rare and expensive parts after a crash.
Modification limits: Standard auto insurance policies have a limit on the number and type of modifications they will cover and may charge exorbitant premiums for extensive mods. Specialists recognise that many grey import vehicles require extensive modifications to be legally driven in Australia and are likely to provide coverage for these enhancements.
Lay-up period: Traditional car insurers provide very limited lay-up periods for imported vehicles. Some do not allow lay-up periods at all. Vintage and classic car specialists, meanwhile, may offer a reduced price for lay-up periods for cars that are rarely used.
Insured value: Standard auto insurance cover market value, although some policies pay out for agreed value, but premiums may cost significantly higher. Prestige car insurance plans cover agreed value by default, which is important, especially for vintage cars with fluctuating market values.
Cover for racing or high-speed use: Conventional insurers rarely offer this kind of cover, while specialists provide coverage for high-risk use, including rallies, time trials, and motorsport events.
Lifetime repair guarantee: Traditional car insurance does not usually provide this option for imported cars with rare or non-standard parts unlike policies designed for imports with hard-to-find components.
Which insurers offer specialised cover for imported vehicles?
According to the Insurance Council of Australia (ICA), there are currently nine insurance companies offering specialised coverage for grey import and prestige vehicles. The table below details what type of coverage these insurers provide. All details are up to date as of June 2022.
Lifetime guarantee of workmanship on authorised repairs
Option to keep damaged car if it is over 35 years at no cost
Up to $20 million liability cover
Emergency cover if car breaks down more than 100 kilometres from home
Up to $500 coverage for emergency repairs
Classic and vintage cars
Agreed value policy
Choice of repairer
Option to retain or purchase car unrepaired if totaled in an accident
Multiple vehicle cover
Protected no-claim discount
Lifetime guarantee on authorised repairs
New replacement car in the event of a total loss
One free windscreen or window glass claim per vehicle per year
Up to $500 coverage for emergency repairs
Up to $500 coverage for accommodation if involved in accident more than 100 kilometres from home
14-day car hire cover following theft, to a maximum of $1,500
$20 million legal liability cover for bodily injury or damage to the property
Why are imported cars more expensive to insure?
Premium prices for imported and other high-value vehicles are more expensive than those for standard domestically purchased cars because of the following reasons:
1. Roadworthiness modifications
Because cars manufactured overseas, especially grey imports, have been designed to adhere to different safety and road standards than those made for Australia, many require extensive modifications for them to be legally allowed to operate on the country’s roads. These modifications usually drive up premiums.
2. Performance differences
Most prestige cars are built for speed and insurance companies typically baulk at providing coverage for these types of vehicles because of the risks involved. Due to their perceived higher chances of being involved in a crash, these cars are more costly to insure.
Many imported vehicles have parts that are very difficult to find within the country’s borders, whether because of the age, market of origin, or rarity. The cost to repair or replace these components significantly pushes up premium prices.
4. Fewer specialist providers
Australia is home to less than 10 insurance companies offering specialised cover to imported and high-value vehicles. Because there is less competition among providers, they are able to raise the cost of car insurance.