Insurance Coverage for Modified Cars

Some motorists like to highly personalize their automobiles cosmetically or mechanically, which may require them to make adjustments to their insurance policies or get a different type of coverage. Otherwise, the additional money spent on the car may not be covered or insurers can actually refuse a claim on the basis that the vehicle is substantially different from what they know, especially in cases of engine upgrades.

Normally, any work done after a vehicle leaves the manufacturing plant is a modification. Minor changes normally don’t cause much of a concern and can be handled by most providers. However, some insurers may not want to cover an auto if the changes are over the top. Some of the common upgrades are custom paints, suspensions, wheels, chrome bars, internal fittings like stereos and engine changes, which can be costly and change the appearance and characteristics of an automobile.

Insurers can refuse a claim if they determine that the main cause of the accident was the work done. So, make sure to disclose all the changes made on a vehicle.

Is It Easy to Find Insurance for Modified Cars?

Many people would fear that premiums may increase a lot and refrain from discussing it over with agents. But they should consider possible consequences of a claim not being paid due to failing to report materially significant facts. Insurers can always argue that they should have known about these changes and take a view on continuing the coverage or dropping it at the next renewal.

Most vehicle insurers deal with street rods, lowriders or tuners pretty often and are capable of pricing them fairly but rates are likely to go up depending on how much modifications have been made to a car, its cost and how it affects the performance. Motorists are advised to discuss the adjustments they are planning to make with an insurance agent beforehand, especially if this is their first project.

Here are the possible insurance coverage options for a modified car;

  1. Custom parts and equipment endorsement on an existing or a standard auto insurance policy is an option when the changes don’t worry providers as much. This is probably the cheapest option and still allows motorists to list the changes they made so that their automobiles are repaired the way it was before the damage or additional works are taken into account when the actual cash value of the automobile is calculated in cases of total loss. Motorists may be required to submit the receipts for the works and they are advised to keep them if they aren’t.
  2. Auto insured on agreed valuation basis. It may be necessary that the car is appraised by a specialist and valuation is agreed and noted on the policy when the works are substantial and increase the vehicle’s open market valuation. This is usually the case when there is artistic paint work or the whole car has been upgraded significantly with special parts and equipment.
  3.  Custom car insurance policy may be required when the changes on the automobile are too much for a regular policy and especially increase the performance significantly. In such cases, motorists need to find specialist insurers. Perhaps they may need to talk to classic car insurance providers because they are experienced in providing coverage for vehicles with hard to find original parts. Otherwise, they may need to talk to brokers specialising in high performance auto insurance.

Comprehensive and Collision coverage is required before motorists can add custom parts endorsement to policies. The same applies to agreed valuation. And they are normally required to inform their insurers of material modifications even if they have Liability only auto insurance coverage because risks and premiums change when you power up your car.

A good example is installing a racing engine to an otherwise modest car. This is likely to cause a serious problem if they don’t know about it. A faster auto means more chance of causing accidents and higher risk. Other examples include ram bars, which can also cause more damages to third party autos. Whatever work is carried out, it is safer to arrange proper coverage even if it means paying a little bit more premium, rather than taking chances.

Insurance Quotes for Modified Autos

If you have received a few quotes before, you probably noticed that some carriers don’t like fast autos even when they aren’t altered. But when you don’t tell about the modifications made you are not only risking your investment on the work but also on the whole car.

As mentioned above, check with specialists by all means but don’t ignore mainstream companies. Most of typical auto insurers can provide certain level of coverage (as much as $5,000 – $10,000) for the following customized parts and equipment:

  • Stereo or sound equipment, radios and scanners
  • Computerized gadgets, inbuilt GPS, phones, TVs and video systems
  • Body, engine, exhaust, or suspension enhancers
  • Custom grilles, louvers, side pipes and spoilers
  • Alloy wheels, tires and spinners
  • Paints, murals and graphics
  • Expensive carpeting or insulation
  • Height-extending roofs
  • Furniture or bars

Costly installations, substantial works and class changing engine replacements may require endorsements on the existing policy, which wouldn’t be particularly difficult. Just that it must be done properly and you see it written on the policy with an endorsement in black and white. This leaves no room for interpretation and you won’t be blamed for hiding anything.

Here are a few other points to keep in mind before starting a project;

  1. You should discuss your plans with the agent or talk to them hypothetically before going ahead with it. They can point you in the right direction and prevent you from making your automobile hard to insure. Perhaps, a slight change in the original plans can still get you what you want and keep the premiums low.
  2. You need to find a reputable garage to carry the works out. This is also essential for safety. You don’t want shady mechanics doing a shoddy job on a vehicle that will carry you and the family.
  3. You need to make sure that it is inspected by the right authorities and approved road-wordy. This is essential after serious work.
  4. Also, it is always advisable to keep invoices and inspection certificates just in case you may need to show them in the future to prove the value of the improvements. They usually ask for them at the time but they may not bother as well. It doesn’t mean that they won’t check after a claim.
  5. Perhaps it is best to coincide them with the renewal, just in case they don’t like it and you need to find replacement coverage. Switching is easier at the end of the term with no hassle with cancellations.

It is also possible that vehicle owners can actually get lower insurance rates after installing things like alarms, rearview cameras, parking sensors or GPS tracking devices. However, any discounts may be eroded by the fact that companies may have to pay more for repairs because these extras cost money to replace. As a general rule, going over the top with these works is likely to increase premiums accordingly.