Santa Claus is riding his sleigh, being pulled behind the reindeer and the background is his naughty or nice list and some snowflakes.

Polina Godz

How does Santa Claus insure his sleigh?

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By

Rachael Brennan

Rachael Brennan

Senior Editor & Licensed Auto Insurance Expert

Rachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.

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As December rolls around each year, financial experts all across the country start asking the tough questions — questions like, how does Santa insure his sleigh? Is it considered an aircraft or an automobile? Are the flying reindeer pets or livestock? Does Santa offer an appropriate benefits package for his elves to encourage them to stay with the workshop instead of pursuing, say, a dental career?

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This is Santa’s busiest time of the year, so Policygenius hasn’t been able to confirm what insurance coverage he chooses to carry, but we have a few ideas about what insurance might be best for Saint Nick. 

Who owns Santa’s sleigh?

How Santa’s sleigh is registered plays a big part in determining how it should be insured. If it is his personal sleigh that he uses when he runs errands, like buying more paper for his list of children who are naughty or nice, it will be registered under his name and require a personal auto insurance policy.

If, on the other hand, the sleigh is owned by Santa’s Workshop and registered as property of the non-profit, it would be considered a business vehicle and require commercial coverage.

What’s the difference between personal and commercial coverage?

Personal and commercial auto insurance are very similar, in that they both offer liability coverage to pay for damage the driver causes to other people and their property. They also both offer comprehensive and collision coverage, which protects the vehicle itself from accidents, theft, and damage caused by things like animals and falling objects.

The big difference between the two is how they are owned and how they are used. A personal vehicle is one that is owned by an individual or a couple that is used for personal things, while a commercial vehicle is one that is owned by a company or organization and is driven by an employee or other approved individual. 

Because Santa only uses it for business purposes once a year and he doesn’t get paid for the work he does with his sleigh, we are going to assume it is his own personal vehicle and that it would be insured under a personal auto policy.

Toy coverage (no, not that kind)

I know what you’re thinking, but toy coverage isn’t insurance for the toys in Santa’s sleigh. We’ve determined that his sleigh should be covered under a personal auto policy, but it isn’t like Santa is delivering presents out of a standard Ford F150. This is a unique type of vehicle, so how exactly would the sleigh be classified for insurance purposes?

Personal auto policies can have a miscellaneous type vehicle endorsement, which is a written addendum to your insurance policy that adds coverage for less common types of vehicles. Often referred to as “toy coverage,” a miscellaneous type vehicle endorsement can add coverage for golf carts, motor homes, ATVs, dune buggies, and other types of vehicles.

Does Santa need comprehensive and collision?

Even though his sleigh is a magical vehicle, Santa would probably still want to have comprehensive and collision coverage. 

Collision coverage would protect Santa if the sleigh were in an accident and sustained expensive damage. Given that Santa’s sleigh travels up to 650 miles per second [1] , it is clearly built to withstand a significant amount of force, but it would still be smart to have coverage in place to make sure he can afford to repair or replace the sleigh if it crashes.

However, Santa might find that comprehensive coverage is even more important than collision. Santa’s never been in an accident (as far as we know) but theft is a potential concern. While the odds of Krampus or the Grinch stealing the sleigh are low, it isn’t out of the range of possibility. This means protection against theft and vandalism is an important part of Santa’s insurance policy.

Comprehensive coverage also protects against damage caused by animals, which is invaluable when your sleigh is attached to nine reindeer.

Liability coverage for Santa

Santa travels the entire world in a single night, stopping at every single house along the way. Despite the magic built into the sleigh, there is a possibility he could cause some type of damage to someone else or their property (like if one of his reindeer runs over someone’s grandma). 

Given his celebrity status and high net worth [2] , Santa would want to carry at least $250,000 in bodily injury coverage per person, $500,000 in bodily injury cover per accident, and $100,000 for property damage liability coverage.

Even these levels of coverage might not be enough to protect jolly old Saint Nick, so he might also want to consider having an umbrella policy.

What about an umbrella policy

An umbrella policy is liability insurance that goes beyond the limits of your primary policy. Not only would it cover Santa Claus in case of bodily injury and property damage, but it also offers coverage for things like libel, slander, and defamation. Santa would probably be especially interested in coverage against wrongful entry and invasion of privacy, both of which are usually covered in an umbrella policy.

Each insurance company is different, however, which means Santa will want to work with his insurance agent to make sure he purchases an umbrella policy that meets his needs. 

Other coverages Santa might need to purchase

If Santa really wants to protect himself financially, he will need to consider bundling insurance policies while he’s bundling up in the snow. Some other policies he may want to consider in addition to auto insurance are: 

  • Pet insurance: Santa has a lot of reindeer, and if he considers them pets instead of livestock he may want to make sure they have pet insurance in case they get sick or injured.

  • Disability insurance: Santa may need to be protected in case he is injured and unable to deliver presents. Not only would he want a disability policy for himself, he may need a commercial disability policy in case any of his elves are injured on the job.

  • Cargo insurance: Santa carries a huge amount of toys in his sleigh each year, which means having insurance in place to protect those presents would be a smart idea.

  • Personal aviation insurance: Santa’s insurance agent may not think the sleigh qualifies as an automobile, in which case he would need a personal aviation insurance policy to protect it.