Should Modified Vehicles Change Insurance Plans?

How Modifying Your Vehicle can Change Your Insurance Policy

Are you one of the thousands of people who have made after-market changes or upgrades to your vehicle? Whether its shiny new rims or some engine upgrades, you may have unknowingly changed your car insurance policy. It’s a little known fact that car insurance companies typically do not insure you for any after-market changes you’ve made to your vehicle and some changes can even completely cancel your policy. So do insurance companies have a problem with you adding a DVD player or expensive sound system to your car? Not necessarily, many insurance companies simply do not know how to determine an accurate and fair policy for vehicles that have made numerous modifications. Insurance companies determine their rates by looking through dozens of statistics for each model of car, such as how much it costs to make certain repairs and what the vehicle’s market value is, by changing your vehicle those statistics are no longer accurate. Of course, many people modify their cars without even telling their insurance company, which means they’ll get to keep their current policy, but their modifications won’t be covered in an accident or robbery. However, there are ways of getting an insurance policy that covers your modifications.

What You Need to Know about Insuring Your Modified Vehicle

• There are three basic types of car insurance available in most states. Actual value insures the vehicle for its value at the time of the claim, agreed value lets the driver insure the car for more than its value, and stated value, which also lets the driver insure the car for than its value, less depreciation.
• If you make any modifications to your car, find out immediately if they’re covered by viewing your insurance policy. Insurance companies are infamous for their tricky wording, exclusions, and conditions, so read carefully.
• Should you have any trouble understanding your insurance policy, contact your insurance agent and get the official word. If it’s regarding a major part of your insurance plan, get it in writing too.
• Remember that even a new paint job can affect your insurance policy. In most cases, you’ll have trouble getting reimbursed for aesthetic changes unless it is clearly in your policy.

Additional Resources:

• Upgrades to Your Car May Mean Increasing Your Insurance
• How to Upgrade Your Car