Modifed Car Insurance

Aftermarket Parts and Insurance

Whether the aftermarket upgrade you’re considering for your car is a giant turbo, custom paint job, a rear spoiler, or an entirely new engine, it is important that you consider a modified car insurance policy before you actually make any changes. Even better, read your policy cover-to-cover, then call your insurance agent and find out exactly what they cover when it comes to tricking out your ride with performance parts.

Why go through the effort of checking with your insurer first? Because most people who drive modified cars, whether they’re modified to be show cars, tuned for performance, or turned into best of show material that exude style beyond their initial price, are woefully underinsured, and the last thing you want is to have your parked car, all upgrades installed, hit by a garbage truck and totaled. Unless your insurer already approved your modifications, you won’t recoup your loss.

It’s About the Risk

Auto insurance rates are determined by evaluating the risks attached to you and your vehicle as compared to a tier-system that considers your insurance credit rating, age, gender, driving record, and type of vehicle. Any vehicle that is outside the norm is considered an increased risk, so while you may be able to insure your stock 1995 240SX for a pretty reasonable rate, the moment you put in that SR20, your risk – and your premium – will increase.

What parts should you tell your insurer about?
All of them, but the most common include:

• Wheels and tires
• Stereo equipment, CD/DVD players, satellite radio, and GPS
• Sun and/or moon roof
• Paint jobs or other body work
• Front or rear spoilers, hood ornaments, or bumpers
• Upholstery or carpeting
• Transmission, brakes
• Any kind of modified lighting, from new headlights, to fog lights to under-body accent lights
• Engine upgrades

Be aware that each upgrade or add-on part will be looked at separately, and also be aware that while some may cause an increase in premium to cover, others will not be covered at all. For example a $5,000 paint job may not actually add value to your car, and while dropping in that crate engine mentioned above will add value (as well as increase your premium), if you plan any engine “chipping” you can pretty much assume you won’t be covered. Otherwise, minor things like upholstery will cost you less to insurer than parts that improve performance (transmission, upgraded brakes) or modifications that make your car a greater target for thieves (wheels, electronic/sound equipment.)

Finally, you can offset some of the additional premium you’ll be paying by adding certain kinds of security devices. Things like LoJack, some alarms and some engine immobilizers will actually reduce what you spend on coverage, because they make your car safer.

As upgrades and modifications become more and more popular, more insurance companies are offering variations of “standard” coverage for cars that have been so altered. So, go ahead and put that new engine in – just check with your insurance company first.