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]
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.