Upgrading Insurance on Newly-Modified Vehicles

So you’ve slapped on some chrome 22″ rims, suped up your engine, and put a great-looking spoiler on the back of your ride. But you still have one area of your car’s performance you have to worry about-the insurance policy. Not many drivers realize that aftermarket parts are usually not insured. In other words, if you have a collision in your newly-modified vehicle, the insurance company is not likely to reimburse you for the damages to your add-ons. In extreme cases, some insurers might deny the claim altogether or even cancel your policy. However, if you’re willing to pay a little more than you would for a standard policy, you can get coverage for your add-ons from specialty or mainstream insurers.

Why All the Fuss

It may seem like insurers harbor a certain prejudice against modified vehicles, but, in reality, they just aren’t structured to handle them. Insurance premiums are based on statistics of risk, and the larger the pool of statistics, the more accurate the numbers are. Because modified vehicles are often one-of-a-kind, insurers have trouble gauging what kind of a risk they represent. These kinds of vehicles were formerly very rare but have become increasingly popular in recent years, in part due to shows like “Pimp My Ride.”

Three Kinds of Car Insurance

If you drive a modified vehicle and you are in an accident, you can either accept the fact that the insurance company will only pay you for the stock value of the car or you can take out special insurance. There are essentially three kinds of insurance: actual value, agreed value, and stated value. Actual value insures the vehicle for its value at the time of the claim. Agreed value allows the driver to insure the vehicle for more than it is worth. Stated value lets the driver insure the vehicle for more than it is worth, less depreciation. Some insurers offer stated and agreed policies, which will provide you with better coverage for a modified vehicle. On the other hand, these policies tend to cost more.

Specialty Insurers

You might also want to consider a specialty insurer that handles primarily hot rods and collector cars. Your car doesn’t have to be a historic one-of-a-kind collector’s item to qualify for these policies most of the time. For example, if you invested $5,000 in rims, your car might qualify for a policy. Of course, these policies come with caveats. Some insurers require that the car be kept in a locked garage and may limit the number of miles it can be driven per year.