Modified Car Insurance — Is It Necessary?
What Qualifies as a Modified Car?
A car is considered modified if it has been altered or customized in some way from its original factory condition. The extent of these modifications can vary widely, from minor cosmetic changes to extensive performance enhancements. Car modifications to equipment, parts, devices, and accessories may include, but are not limited to:
- Antennas and other devices used to send or receive audio
- Bedliners
- Body or suspension alterations
- Custom or special wheels or tires
- Custom painting
- Custom windows
- Electronic equipment
- Ground effects
- Light bars
- Murals, decals or graphics.
- Roll bars
- Side exhausts
- Spoilers
- Utility boxes
- Visual or data signals or playback recorded media
How does modifying a car affect insurance?
Modifying your car often means modifying your auto insurance, too, impacting your coverage in a few ways.
Modifications can affect the types of coverage needed.
To cover a modified car, you typically need custom parts and equipment coverage added to your comprehensive and collision coverages, and the limits must be high enough to cover the modifications. Some people refer to this group of coverages as modified car insurance. However, not all modifications fall under custom parts and equipment. For example, a vehicle modified with certain adaptive equipment, such as a wheelchair lift, may be covered under collision and comprehensive coverages.
Modifications can affect the limits you need to carry.
Some insurance policies, such as those you can get with Direct Auto, automatically include $1,000 of customized equipment and parts coverage with base comprehensive and collision coverages. However, often, the value of modifications costs much more. In that case, you would want to purchase higher limits for adequate coverage. Some insurers provide a max limit of $5,000, but others may offer more.
Certain modifications may make it difficult to obtain coverage.
Insurance companies may refuse to cover you if the modifications are deemed unacceptable, such as illegal or high-risk mods related to street racing. Add-ons like snowplows or snow removal equipment may also be challenging to get covered. It's a good idea to consult your insurance agent before making any modifications to ensure they are covered.
Potential real-life scenario: You have comprehensive and collision coverages with $5,000.00 of customized equipment and parts coverage and a $500 deductible. A covered accident damages your truck’s suspension lift kit. After paying your deductible, your insurer will cover the remaining actual cash value up to $5,000.00.
Does modified car insurance cost more?
Modifying your vehicle may or may not affect your premium. Some modifications, such as safety and security features, can lower your insurance rate and qualify you for an anti-theft recovery discount. On the other hand, certain modifications, like an expensive turbocharged engine, could raise your premium. Generally, though, non-safety vehicle modifications result in higher insurance costs. Sometimes, the increase is slight, but other times, it can be more significant since repairing or replacing modified parts is usually more expensive. Essentially, the impact on your insurance cost depends on the value of your modifications.
Should I tell my insurance company my car is modified?
It's important to inform your insurance company if your car is modified. Standard auto policies are designed to cover the repair or replacement of a vehicle as it was originally manufactured, so it's essential for your insurance company to know about any aftermarket parts you wish to have covered. If a custom part is not listed on your policy, some insurers may not cover it. Your insurance agent can help ensure that your custom car insurance accurately reflects the value and risk of your modified vehicle, allowing you to avoid potential issues with your coverage or claims in the future.
Modified Car Insurance Frequently Asked Questions
How do I know if my car is considered modified?
Most permanently installed parts and upgrades that alter your car’s appearance or performance are considered modified. Simply accessorizing your car with new floor mats or a steering wheel cover does not mean your car has been modified. If you purchased a used car and didn’t make any modifications yourself, you can look for visual cues such as spoilers, nonstandard wheels or rims, lowered suspension, or inconsistencies in the paint finish. If you're unsure whether your car is considered modified, it's best to consult with a professional or your insurance provider for clarification.
What if I buy a car that has already been modified?
When purchasing a car that has been modified, it's important to understand that even if you didn't make the changes yourself, the vehicle is still classified as modified. Therefore, be sure to let your insurance company know about the existing modifications, including all aesthetic and performance enhancements. This way, your insurance coverage can accurately reflect the added value of the modified vehicle.
Is it legal to modify your car?
It depends. Some vehicle modifications, such as tampering with a vehicle's emissions control system is illegal nationwide. Other vehicle modification laws vary by state (e.g., window tinting and neon underglow). You can expect to pay a fine if you don't follow the local rules and regulations that apply in your state, plus your insurance may not cover you. It's advisable to research what’s street-legal in your area before customizing your vehicle to ensure compliance with the law.
Does modifying a car void insurance?
Modifying a car does not automatically void insurance. However, failure to disclose modifications could result in your insurance policy being voided or claims being denied in the event of an accident. So be sure to tell your insurance agent about any modifications to avoid potential issues with your insurance coverage and ensure that you have the proper protection for your car.
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