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Modified car insurance

Find out which mods need custom car insurance coverage — and which ones are covered for free.

Modified cars can be more expensive to insure, but increased competition among insurers means it’s still possible to get affordable coverage for your vehicle, as long as it’s street legal.

Should I tell my insurance company about car modifications?

Yes. If you don’t tell your insurer, they can reject your claim if you get into an accident — even if you’ve been paying your premiums. If your vehicle is under warranty and you don’t tell the insurer, you may void the warranty.

It’s a good idea to tell your insurer about planned modifications before you make them so you can find out if you’ll be covered — and how much it’ll cost.

If you already made the modifications and your insurance won’t cover you, you’ll need to either shop around for another insurer or undo the modifications. In most states, it’s not legal to drive a car if it isn’t insured.

Modified car insurance coverage to consider

You’ll still need coverage like liability or comprehensive to cover your customized car, but you’ll need additional insurance to cover modifications. Generally, you have two options:

  • Custom equipment or modifications coverage. This extra coverage is offered for mods and aftermarket changes made to your car. The premium depends on the insurer, but can cost up to 10% of the modifications. Some insurance companies pay up to $4,000 for customized parts and equipment coverage if those items need to be replaced or damaged.
  • Classic or collectible car insurance. If you can’t find a carrier to give you the coverage your car needs, insurance companies like Hagerty, J.C. Taylor, Condon Skelly, Grundy and American National all specialize in providing coverage for collectible cars.

Do I need agreed value coverage?

Agreed value coverage is helpful if you’ve made extensive modifications to your car and you want insurance to pay for those mods after a car accident. Your car’s agreed value is how much you and your insurer agree that your car is worth. It takes into account both the money and time you put into customizations, making it the preferred option for many modified car owners.

Most car insurance policies pay the market value for your car’s repairs or for replacing your car, and that market value is subject to depreciation. The money that you’ve spent customizing your car isn’t reflected in its market value.

Insuring your car at an agreed value generally costs more, but you’ll be covered if those mods get damaged in a car accident or your car is totaled. Weigh the cost against the benefits when choosing market value or agreed value for your car insurance policy.

Which mods does car insurance cover for free?

So you’ve added a hydraulic suspension to your Honda Civic, racing spoilers to your Camaro or a supercharger to your Cadillac. Now you’ve got to find insurance to cover it.

There are changes you can make to your car without having to change your insurance. Modification coverage varies by insurance companies, but in general:

Modifications that are generally covered

  • Alloy wheels
  • Bicycle racks
  • Bull bars
  • CD stackers
  • Chrome exhaust systems
  • Driving lights
  • Leather seats
  • Muffler to make your car quieter
  • Reversing cameras
  • Roof racks
  • Tow bars
  • Sunroofs
  • Spoiler — Your premium will go up if it raises your car’s value.

Modifications that need add-on coverage

  • Auxiliary lights
  • Custom paint work
  • Custom tires, rims or spinners
  • Disability-related car modifications such as wheelchair lifts
  • Nitro or hydrogen fuel equipped engines
  • Roll bars or cages
  • Racing harnesses
  • Replacing your exhaust system to boost performance
  • Sound systems like stereo, DVD or computers
  • Turbo or supercharged engines

For certain modifications, insurers will decide coverage on a case-by-case basis. If your modifications affect your car’s performance or value, contact your insurance company to find out if they’ll cover a performance car — ideally before committing to the modification.

Modifications that are typically not permitted

Each state has its own laws around car modifications that depend on what you’re modifying and where you drive. Be sure that all modifications made to your car are street-legal — otherwise, no insurer is going to look at you. If you’re stopped by the police with illegal modifications, you might face a fine and have your vehicle towed on the spot.

  • Dark window tinting
  • Flashing lights that look like a police car’s lights
  • Loud exhaust systems
  • Changes to the engine that don’t fit the legal standard
  • Illegal changes to the chassis
  • Noncompliant changes to the tires
  • Changes to the suspension that don’t comply with legal standards

How to buy modified car insurance

Here’s what to consider before deciding on insurance for your souped-up ride.

  1. Compare your choices. Look at car insurance from specialty insurers, and not only the big names. They’ll consider things like your safe driving history, claims history and whether you have any driving offenses.
  2. Weigh risks and costs. Even if your insurer will cover you, the changes you make could raise your premium higher than you’re willing to pay — sometimes well over the value of the car.
  3. Talk to an agent. Anytime you make modifications to your car, it’s best to talk to an agent.
  4. Read the fine print. Look through your existing policy to better understand what things are included already.
  5. Get information in writing. To be sure that you have all of your modifications covered, your agent can provide a clear list of the policy through email or a letter.
  6. Be honest. Don’t try to hide changes made to your car. If your car isn’t insured for the right amount, you’ll lose the value of your modifications in the case of an accident. Your insurer also has the right to cancel your policy or deny a claim if you don’t disclose changes you made to your car.

9 tips to save money on custom car insurance

It depends on how tripped up your car is. Like any car insurance policy, there are lots of ways to reduce the cost of your premiums:

  1. Drive less powerful or less expensive vehicles for lower premiums.
  2. Restrict the number and age of drivers on your policy.
  3. Look into pay-as-you-go policies.
  4. Increase your deductible for a lower premium.
  5. Install security devices that land discounts like an antitheft alarm or engine-cut system.
  6. Save by bundling your insurance policies with one provider.
  7. Choosing a company that offers rewards for no claims.
  8. Insure your car’s market value instead of the agreed value.
  9. Look for discounts on your premium, some could save you up to 20%.

      Get car insurance for your modified car

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      All 50 states
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      loan/lease coverage
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      Depends on provider
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      Get your most compatible insurance options via a "smart matching" method aimed at finding you value.
      Telematics only
      Available in 31 states
      Track your driving to receive a low rate that reflects your driving skills, and enjoy a fully app-based policy experience.
      The AARP Auto Insurance Program from the Hartford
      All 50 states
      Enjoy low rates for mature drivers, plus perks like new car replacement and lifetime repair guarantees. Only for drivers over age 50.
      All 50 states & DC
      Affordable car insurance with highly rated customer service. Only available to military members and veterans and their family.

      Compare up to 4 providers

      Bottom line

      Unlike standard parts that cost a set price to replace, you’ll pay more for custom parts — and insurers will charge more to cover them. The more extensive and expensive the modifications, the more you can expect to pay for your insurance premium.

      The good news is that by shopping around and comparing your options, including the best providers and best discounts, you could save on your modified car insurance.

      Compare modified car insurance policies

      Picture: Shutterstock

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