Would Car Insurance Automatically Include Custom Equipment?

Recently you have treated yourself to a new $2000 worth of stereo and audio set for the car. Now, it could be a mistake to assume that lately installed custom equipment is automatically included in auto insurance coverage since they just replaced the original one. You would need to talk to the carrier about it and this may result in an additional premium.

If you spent $2,000 for a new stereo and audio set you obviously enjoy listening to music while driving. Now consider this; your automobile is stolen and the insurer has to compensate you enough to buy another similar car. You don’t want to receive another same model automobile with factory-installed stereo. You want one that has a better sound system just like you had. That costs extra money and therefore they need to pay you more.

Usually, they would check the market and find couple of vehicles that are similar to the one stolen or totaled and offer a settlement reflecting the average market price. If they were aware of the improvements they would add a bit more for them.

Insurance companies require previous declaration to prevent people making outrages claims about how customized the stolen auto was and what extras it had. This can be done with an endorsement on the policy that clearly states your car has $2,000 worth of additional equipment installed. Generally, there would be little more premium to be paid.

Normally, motorists don’t need to mention few hundred bucks worth of improvements. Also, you don’t need to tell them when you replaced the old stereo with a similar one because it broke down. Any work over $1,000 and any single equipment worth over $500 should be reported. In any case, you should always keep the receipts.

Replacement auto body parts are totally different story. You don’t normally need to talk about them, unless you are taking the engine out in a sedan and putting twice-powerful sports car engine. Any performance enhancing modifications should ideally be discussed with the company beforehand or they should be informed as soon as possible. Also, they would want to know about any work on the moving parts like turning an automobile to a low rider.

Good communication is beneficial for you and them. It could create problems if it isn’t clear what is covered and what is left out, especially when you have a claim. Generally, you don’t want to leave anything to chance when it comes to insuring vehicles. You may have to pay a little bit additional premium but it is probably a fair price for having a peace of mind.

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