Are my vehicles modifications covered by my car insurance?
If you are a car enthusiast looking to customize or modify your car, there are a few things you should consider before taking action. Altering your vehicle can impact your car insurance coverage negatively or positively, depending on the kind of modification. Furthermore, whatever you decide to do with your vehicle must adhere to your state’s laws. This will require a bit of research on your part, but knowing what questions to ask your insurance provider and what coverages to look out for will be important. You will also need to know instances where your modified vehicle may not be covered.
Modifications That Might Impact Your Coverage
Standard auto insurance policies typically do not cover vehicle customizations or modifications that are not made in your car’s manufacturer factory. Insurance companies will regard your vehicle as modified or customized if the way your vehicle looks or drivers is altered in any way. This includes custom paint jobs, spinners, spoilers or speed enhancements like turbochargers. Modifications also include adding electronic equipment, like a custom stereo or video system, or a wheelchair lift if you or a family member is handicapped.
When making these modifications, it is important to ask how they can impact your coverage. The kind of customizations added to your vehicle will ultimately determine how your coverage will be affected. Your insurance provider will most likely want to know if your modifications are performance enhancing or alter the physical appearance of your vehicle. If your customizations increase the horsepower of your vehicle, your insurance provider may not be able to cover them in an accident. Your insurance premiums will increase and your insurance company will flag you as a high-risk driver. On the other hand, cosmetic modifications may not impact your coverage as much unless the value of your car significantly increases. If your modifications are designed to increase your vehicle’s safety, your coverage will most likely not be affected and you may actually qualify for a discount on your insurance premium.
Make sure your vehicle modifications are legal or you will have serious trouble finding an auto insurance company that will cover you. You may even find yourself in hot water with the law if you are pulled over. This can result in a steep fine, vehicle impoundment or driving suspension. Although these laws may vary by state, common unlawful customizations include dark tinting, HID headlamps, lifts and loud exhaust systems. Make sure to check your state laws on vehicle modifications before making an installment or change to your car.
Coverages Offered for Modifications
When searching for a coverage that covers new installments or alterations, look for supplemental coverage and classic or collectible car insurance. Many insurance providers, like Esurance, offer supplemental coverage separate from collision and comprehensive coverage for customized parts and equipment. This means if your modified parts are ever damaged in a wreck, you will be reimbursed for their value. If your current insurance carrier does not provide this supplemental coverage, look into other insurance companies that provide the endorsement or consider switching to a classic/collectible car insurance. Insurance companies, like Hagerty and Farmers, typically offer coverage for add-on or customized parts.
Most, if not all, insurance companies will refuse to cover damages resulting in an accident due to racing, regardless of whether it is legal in your state. Depending on your state, your insurance provider may be required to refuse coverage on damages for simply test-driving your modified vehicle on a race track. Contrarily, there are certain states that do not allow insurance companies to deny coverage for modified vehicles that are driven on race tracks. However, if the vehicle were racing at the time of the accident, no damages are covered.
Failure to Report Modifications
Your insurance provider will not cover any modifications that are illegal or undocumented. This means if the value of your vehicle goes up due to customizations, you will only be covered for part of your claim based on your car’s original value. Even worse, your insurance provider can void your entire claim or insurance policy altogether if you hide any modifications. To avoid this from happening, notify your insurance provider of all modifications even if you believe a few may be illegal. You want to make sure that the true value of your car is covered in the event of an accident.