How To Insure Your Car Modifications
By Aaron Crowe
Modifying your car can be a personal statement and a lot of fun, if you can afford it.
From stereos and entertainment systems to custom wheels, paint jobs and hydraulics that can bounce your car into the air, it can be easy to spend thousands of dollars on customized parts and equipment.
Getting those modifications insured, however, can be difficult and require additional coverage that will likely be limited.
And, just to be clear, when talking about car modifications, we’re talking about legal ones that insurance companies will at least consider covering. Illegal modifications, such as HID headlights and undercarriage lighting, aren’t covered.
Other modifications, such as lifting the suspension or frame and body, may be limited in height by state regulations. Some states measure by maximum headlight and taillight heights and others measure by maximum bumper heights.
Pennsylvania, for example, doesn’t allow front lift blocks to raise a vehicle’s height, and rear lift blocks can’t exceed five inches over original equipment. New York doesn’t have suspension lift limits.
Some modifications may not be covered because they’re not permanently attached to the car and can be easily stolen. Adding sub-woofers to the trunk that aren’t screwed in could mean no coverage if they’re stolen because they’re technically not part of the vehicle.
$4,000 in coverage
Auto insurer Esurance sells policies that offer up to $4,000 in coverage for customized parts and equipment that are damaged or need to be replaced. These include:
- Stereo and television equipment.
- Radios, citizen band radios and scanners.
- Personal computers, Internet access and navigation systems.
- Body, engine, exhaust or suspension enhancers.
- Custom grilles, spoilers.
- Custom wheels, tires, or spinners.
- Custom chrome and paint.
- Special carpeting or insulation.
- Furniture or bars.
- Height-extending roofs.
- Custom murals, paintings or other decals or graphics.
Its standard policy only covers original equipment included by the manufacturer, and customized parts must be part of any additional insurance coverage. Some states may require buying comprehensive and collision coverage in order to get customized parts and equipment coverage.
Extras installed by the dealer, such as a better stereo than what comes with the base model of a car, should be covered by a regular policy, says Keith Going, director of insurance relations for Carstar, an auto body repair business. The thinking is that the customer will argue that the “extra” was part of the car’s original equipment and should be covered by the manufacturer if damaged, Going says.
It’s still a grey area worth checking with your insurance agent, says Going, who previously worked in the auto insurance industry, because some insurers will put a $1,500 cap on after-market modifications.
“Many people do not have that dialog with their agent,” he says, and are surprised by what isn’t covered by their insurance.
“They’re just not aware, in many cases, of what their policy covers and doesn’t cover,” Going says.
When checking with an insurance agent, some will want to know not only what the modification is, but how it will be used, says Todd Balderson, owner of Balderson Insurance Agency in Silver Spring, Maryland. For example, is it for speed and increasing the performance of the car or motorcycle?
Insurance companies may also want to know who is doing the work and their qualifications, Balderson says.
“If it is your buddy down the street, you may find yourself with an uninsurable vehicle,” he says.
Adding $4,000 in coverage isn’t much if you’ve spent double that on new rims, a stereo system and paint job. To get extra coverage, you can go to a collector car insurance company such as Hagerty or Grundy that specialize in custom and collectible cars.
A modified car doesn’t have to be a classic car such as a ’57 Chevy that’s only driven on weekends, or hauled on a trailer to classic car shows. A modified Honda Civic, which is one of the most popular cars to modify, can get extra coverage through a company such as Hagerty.
The company doesn’t limit how much the modified car is driven, though how much they’re used helps in determining an insurance rate.
It considers a vehicle to be modified if its performance has been significantly increased, or the body, chassis or frame have been structurally altered, or a custom paint job cost more than $10,000.
Drivers may not want extra coverage
Car owners who have added turbochargers, nitrous oxide injection systems and other ways to amplify engine power may not drive fast and recklessly, as the stereotype may dictate. Instead, they may not drive it much, keep it in a garage or other safe place, and take care of regular maintenance.
Those qualities can help get a better insurance rate. Even so, they may not get extra insurance for their vehicle modifications because they either think it’s too expensive or just don’t think of it.
“Many of them, they just don’t get the extra coverage,” says Paul Nadjarian, founder of Mojo Motors, which helps people find used cars to buy.
Some may only take their modified cars to car shows in a trailer, and feel an anti-theft device is enough to keep it safe, Nadjarian says.
“Some of these folks, they just don’t care,” he says of adding insurance.
Others may assume they’re covered by their normal insurance policy, says Carstar’s Going of young drivers with a second, modified car on their policy, along with a first car that isn’t modified that they drive regularly.
“They just don’t know that ‘I’m supposed to call my insurance company because I just upgraded from a $200 stereo system to a $1,500 system.’ A lot of times they think they’re covered, but they’re not,” Going says.
The bottom line: Check with your insurance agent before making any car modifications to see if you’re covered.
Aaron Crowe is a journalist who coves the auto industry for CheapCarInsurance.net.