Properly Insuring Your Modified Car
As soon as you add a decal racing stripe to your paint job, you have a modified car. Auto modifications can affect the overall value of your car and therefore your car-insurance policy. Now, a decal stripe doesn't really alter the value of your auto, but everything from spoilers to new carpeting can. Properly insure your modified car to protect your assets, including the additions themselves.
Modifications That Can Affect your Policy
You'll need to talk to your insurance agent about the exact modifications that affect the value of your car and therefore your insurance policy. Anything that adds value can affect your premium, but some things will affect your premium more than others. This can include something simple, such as the installation of alloy wheels. Such modifications don't significantly increase the value of your car, so they'll affect your policy little, if at all. Something like a truck liner or chrome bumpers might have a little more effect.
More drastic modifications include spoilers, roll bars, and custom paintwork. These may have a big effect on your insurance premium.
If the modifications radically increase the value of your car, consider getting collector's insurance. These policies usually carry a higher premium but also significantly raise the pay-out ceiling.
Reporting the Modifications
The truth is, you may ending paying a higher premium if you've made big modifications to your car. If you have comprehensive and collision insurance, the company will pay out in the event your car is stolen or totaled in an accident. However, your policy won't cover modifications unless you've reported them. You may even want to purchase equipment coverage for very expensive modifications. On the other hand, if you get into an accident with an unreported modified car, your entire policy may be considered void.
Exclusions
As Insure.com points out, most insurance companies are going to have restrictions or even exclusions. For example, as with any policy, your specialty insurance will only cover up to a certain value. Any money you've invested in modification above that amount may be lost. Some insurance companies won't cover radically modified cars at all.
Most insurance companies have racing exclusions. This means that, even if you're involved in a legal race, your policy won't cover damages in case of an accident. Indeed, some states have laws that won't even allow you to test-drive a modified auto on a race track and be covered. On the other hand, other states allow you to drive on a race track and be covered as long as you weren't actually racing. Talk to your agent about these exclusions if you plan to race.
Make sure your modified vehicle is adequately covered so you don't lose out on your investment. Click here for info on car insurance.
Share