The Best Modified Car Insurance Companies (2023)

You can modify your car in many ways to enhance its style or performance. You can add flashy lights, better brakes, in-car entertainment systems, and more.

In 2021, drivers in the U.S. spent $50.9 billion on specialty car equipment. Pickup trucks were the most common vehicle type that drivers modified, typically with truck bed covers, bed liners, truck caps, and more.^[1]

As fun as it is to modify your car to your liking, this can make the vehicle more expensive to repair or replace, which can increase your insurance costs. This is where modified car insurance can come in handy.

What is modified car insurance?

Modified car insurance is a type of insurance policy for cars with custom additions. If your modifications cause your car to cost more than the original selling price, you may need a specialized insurance policy.

Traditional auto insurance policies don’t cover custom modifications in the event of theft or damage. However, customizations that the manufacturer added during assembly, like an updated trim or rearview camera, aren’t considered custom modifications. If you add any customizations to a car, you may need to purchase custom parts and equipment coverage, which will protect those modifications up to a certain limit.

If you restored a 25-year-old or older car, then you may need classic car insurance. Classic car insurance uses an appraiser to help the owner and insurance company come to an agreement on the value of the car, which will affect the premiums for insuring it.^[2]

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How much does it cost to insure a modified car?

Standard car insurance policies don’t cover modifications. You need to add coverage for your modifications as an endorsement or find a specialized modified insurance policy.

“This is because anything you add to your vehicle increases its replacement value,” explains Mark Friedlander, Insurance Information Institute director of corporate communications. “Also, many insurers classify modified vehicles as higher-risk, especially for their greater potential of theft due to the enhancements.”

If you’re not sure if you can insure your modifications under your current car insurance policy, call a representative to get advice. “Check with your agent or insurer to see if your modifications can be added as an endorsement to your existing policy,” Friedlander advises. 

If your insurer doesn’t cover the modifications, you may need to find another company that specializes in this type of coverage.

Agreed value policy

When you buy a modified car insurance policy, you may need to work with the insurance company to determine how much your car would cost to repair or replace with its modifications. You may need to work with an appraiser to come to an agreement.

An appraisal will help you determine the agreed value of the car so if the insurer declares the car a total loss, it will be clear how much the insurance company will pay to replace your car.

Best modified car insurance companies

Before you choose a modified car insurance policy, it’s important to shop around to find the best possible coverage for your needs. If you require modified car insurance, take a look at some of the best insurance providers for modified cars.

Hagerty

Hagerty offers modified vehicle coverage for new cars, classic cars, foreign imports, and hot rods. If you like to fix up your car yourself and keep spare parts on hand, you’ll be happy to know that Hagerty offers $750 in spare parts coverage, and you can purchase additional coverage starting at just $1 per month.

PEMCO

PEMCO offers various auto insurance coverages to help make sure you have the exact coverage you need, and that includes offering protection for modified cars, both antique and modern. PEMCO also calls its modified car insurance custom parts and equipment coverage.

Progressive

Progressive refers to its insurance for modified cars as custom car parts and equipment insurance (CPE insurance). The way this coverage works is that any aftermarket modifications you make to your car need to have CPE coverage, which typically comes with a $5,000 limit.

Different types of car modifications

The more your modifications increase the value of your car, the more likely your car insurance rates will increase. Some insurance companies will also take into account whether you installed the new parts yourself or had them professionally installed.

Modifying a car involves swapping out the factory parts or adding aftermarket parts. Some common examples of popular modifications include:^[1]

• Custom paint

• Fender, hood, and body upgrades

• Trailer and towing parts

• Truck bed liners and bed accessories

• Seats and upholstery

• Dash systems and gauges

• Headlights and taillights

• Exterior accessory lighting

• Interior lighting

• Sound system and audio accessories

• Alarms and security products

• Mobile TV and video cameras

Insurance considerations before modifying your car

Before you modify a car or add any aftermarket customizations, take the long-term effects of those changes into account. Consider how modifications will affect your insurance rates since you have to make premium payments to keep the car insured.

Will vehicle modifications raise your car insurance rates?

Generally, vehicle modifications may raise car insurance rates, but this isn’t always the case. Modifications can increase insurance premiums because repairing or replacing modified parts is typically more expensive. As a result, you end up paying more. Before you make any modifications to your car, ask your insurance company how those changes could increase your auto insurance rates.

Are you buying a car that’s already modified?

Just because you didn’t make modifications to a car doesn’t mean you can ignore them. When you buy a used car, it’s best to have a mechanic inspect the car before you complete the purchase. Make sure you’re aware of any modifications so you can get an accurate quote for car insurance. The car’s value will influence how much you spend on auto insurance.^[3]

How to buy modified car insurance

If you make a modification to your car or buy a car with modifications, take these steps to get insurance for your modified car:

1. Do your research. You can start with your current auto insurance provider. Let it know what types of modifications you have, and ask what options are available for modified car insurance coverage. Once you have a baseline with your current insurance provider of what to expect, you can start to research other providers.

2. Shop around. Take some time to request quotes from different car insurance companies to get an idea of which ones can offer you the most coverage for the best price. It’s a good idea to get specific about the modifications you need insured so you can get an accurate picture when it comes to pricing.

3. Choose between an endorsement and a new policy. Car insurance companies may handle modified car insurance needs differently. Some will require you to pay for a separate modified policy, and others will have you add an endorsement, which acts as a supplement to your insurance. You can consider these options when you get different quotes.

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