Flying-car insurance may cost $60K
Terrafugia's Transition is expected to go on sale next year. But insuring it might cost you as much as a new BMW.
This post comes from Kelli B. Grant at partner siteSmartMoney.
After years of flying-car-envy from watching "The Jetsons" and "Back to the Future Part II," drivers are merely months away from being able to buy their own. Experts say that insuring one, however, might be an even more futuristic challenge.
Auto show attendees will get their first glimpse this week of Terrafugia's Transition, a two-seat car with wings that fold out for flight. The company announced earlier this week that the vehicle completed its first flight -- and could be for sale within a year. About 100 people have already plunked down a deposit for the flying car, which is expected to sell for $279,000.
But insurers have yet to introduce a flying-car policy, and experts say buyers could have limited options. "There's no off-the-shelf policy for something like this," says Robert Hartwig, the president of the Insurance Information Institute. There are perhaps only a few insurers in the nation that would even consider creating such a hybrid offering, says insurance consultant Scott Simmonds. "You'd be lucky to find two," he says.
Selling coverage for airborne fender benders would also require approval from state insurance commissioners, which could further limit buyers' options. (Post continues below.)
Terrafugia says it is working with insurers and state officials to make sure car flyers have coverage. "We wouldn't let them out on their own trying to secure an insurance program for a flying car," says Richard Gersh, the company's vice president of business development. "We can't discuss specifics because we're still the better part of a year away from first delivery," he says.
Experts estimate annual premiums could run as high as $60,000 -- more than 76 times the average $785 household auto insurance policy. "It's the flying aspect of the car," says Simmonds. "That's the exposure with hair on it."
Policies for light aircraft can cost as little as $3,000, he says, but a flying car is likely to fall into the more expensive experimental aircraft category. Premiums would also reflect the higher possible expense of any air or road accident, Hartwig says. Injuries and property damage from crash-landing a plane, for example, are likely to be more grievous than those incurred when driving, which affects liability coverage.
Even a minor accident could be expensive to fix -- few mechanics could handle such repairs, and the Federal Aviation Administration would have to re-certify the vehicle as flight-worthy, he says. Flying-car buyers could also see higher premiums if their records as a pilot or a driver aren't spotless, they say.
More from SmartMoney and MSN Money:
Copyright © 2014 Microsoft. All rights reserved.
ABOUT SMART SPENDING
LATEST BLOG POSTS
If you worry about money after the streetlights come on, these actions may help you rest easier.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'