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Modified Car Insurance Coverage

Modified Car Insurance

Speed, style, and flair mean everything to some car owners. This is why some drivers “soup up" their cars by making certain modifications to enhance their appearance and performance.

These modified vehicles, however, often result in higher car insurance premiums because they are considered a higher risk to insure. Insurance companies may find these drivers to exercise unsafe behaviors behind the wheel. Additionally, the parts can be worth more than the vehicle itself.

Modified car insurance may be hard to find, but that doesn't necessarily mean you can't obtain appropriate car insurance for your enhanced vehicle. However, certain factors will play a role in your coverage and premium, including:

  • The extent of modifications you've made.
  • The insurance company you select.
  • Your state of residence.

What Is a Modified Car?

A modified car is different than a fancy sports car, classic hot rod, or luxury vehicle.

A modified car is any car that has been altered or enhanced for the purpose of appearance or performance. Typically, the car is modified with aftermarket components*.

Your car insurance company may have specific standards for what qualifies as modifications. Examples may include:

  • Custom paint jobs.
  • Structural alterations to the frame, chassis, and/or body.
  • Significant performance increases.

If you believe your vehicle qualifies as a modified vehicle, you may wish to obtain additional coverage from your insurance company, such as custom parts and equipment coverage or collector car insurance. (See “Choosing the Right Coverage" below.)

* Market for accessories and spare parts used to enhance or modify a vehicle.

Modification Types that Affect Car Insurance

Modifications can take many forms and often include the following custom parts and equipment:

  • Chrome bumpers.
  • Chrome wheels and racing tires.
  • Vertical doors.
  • Auxiliary lighting (fog lights).
  • Hood ornaments.
  • Front or rear spoilers.
  • Under-car accent lights.
  • New stereo equipment.

Depending on the enhancements you choose, you could pay anywhere from $200 to $10,000 or more for improvements.

Choosing the Right Coverage

When you've “souped up" your car, you will want to make sure your new parts and additions are covered.

Many comprehensive car insurance policies include some type of coverage for special parts; however, you may wish to purchase equipment coverage to ensure the bling you've added actually gets paid for in the event of an accident.

You might also find that your car qualifies for collector car insurance coverage. Check with your insurance company to see if your vehicle qualifies.

Modified Car Insurance Exclusions

Racing Exclusions

One major exclusion that car insurance companies often impose is that you will not be covered if you have an accident while racing (regardless of its legality). In fact, depending on the state you reside in, even test-driving your modified vehicle on a racetrack may not be covered.

However, as long as the modified car wasn't actually racing on a track, some states will not allow insurers to deny coverage for crashes on racetracks. That means you can drive your car on a racetrack, as fast as you want, and still be covered (as long as you're not racing).

Keep in mind that this depends on your policy and the state you live in. It's always best to review your policy and speak to an agent to be sure of what is and what is not covered.

Reporting Exclusions

What happens if you get into an accident and you didn't report modifications? Are they covered?

Generally speaking, if your modifications were not reported or if they are illegal, they typically won't be covered in the case of an accident.

In some cases, you'll be reimbursed for part of your claim, but not for every modification you've made to your car. Insurance companies also have, in some cases, the option of voiding your insurance policy altogether due to the undisclosed modifications.

In order to ensure that you are reimbursed after an accident, you should notify your insurance company or your insurance agent of every modification you've made. It may be tempting not to report some, but understand that you may not be reimbursed for those undisclosed modifications later.

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