Insurance and Mods?

[CR-Z Canadian]

I had an interesting chat with my insurance broker today. If you've been modding cars since you first learned how to drive, this probably isn't news to you, but if you are a modding virgin like me, you might find this interesting. If you are an insurance professional or have had experience with this, your comments are most welcome.

First, the fine print: This applies based on Ontario auto insurance legislation and State Farm policies. Other companies in other jurisdictions may treat matters differently. Keep in mind, I've dealt with this agent for over 30 years.

Background - some of the cosmetic changes I am looking at are not cheap. So, after wkqkqkfk's recent experience, I wondered how my insurance would respond to a major loss (theft or write-off, where the removable alterations were too badly damaged to be salvaged).

The bad news came in two parts.
SF takes a very dim view of any mods affecting safety or performance systems (engine, suspension, lighting, seats that change airbag deployment, etc.). That's not just about the vehicle's value, but possibly the share of responsibility in the case of injury or damage. Sounds a bit like scare mongering to me, but I'm not sure I want to find out for sure.

The other part was that, in Ontario at least, the payout for a total loss is based on market value - not replacement cost. That's the market value of comparable make/model/trim level to your vehicle (which is a range, depending on condition, mileage, if you recently put new tires on, ...). So even if the work was done by the dealer before the car was delivered (HONDA exterior appearance package, for instance), it might put your settlement higher up in that range, but that's it. State Farm has a 24 month "no depreciation" option, which would replace the vehicle (or the original purchase price of the car, whichever is lower) in the event of a total loss in that period, so pre-delivery options would be covered under that. But not after-market (or OEM post-delivery) Mods. Much different from, say, a home renovation where you simply increase the house coverage, and your premium goes up in proportion. That's typically replacement value coverage, and does not typically apply to cars (here in Ontario, anyway).

That mainly applies for total loss claims. What was not as clear, is what happens if you are in an accident, and are "hit in the mods" . I couldn't tell if the car would be restored to OEM condition, or to the way you modded it, but I have a pretty good idea it will be the former.

So, the bottom line appears to be that all your extra investment is not protected beyond, at best, what it would do to the market price of your car. And since there are so few CR-Z's around, let alone modded ones to compare to (and most mods are unique), it becomes a subjective game on the part of the adjuster. With all the money, time, and care that some of you have in your cars, I hope your insurance treats you better.

Here's hoping none of us need to test this.

[hotboxn]

I had Statefarm on a few vehicles since I was 16 and all have been heavily modified. Two were involved in collisions and one was my fault. They replace all parts BOLTED to the vehicle. Other insurance companies require that you state the parts to them when you add them and have all receipts showing you purchased the parts. Having pictures of the parts mounted doesn't hurt either. Then again, who doesnt take pictures after they put on a new part lol

[wkqkqkfk]

I actually am going through this at this moment, Im with Belair direct and today I talked to my bodyshop and they are in the process of cutting me a cheque for the vinyl wrap work done to my car as well as Type R emblem that broke at the accident. I am crossing my fingers that my insurance rate will not rise due to this but I will have to wait and see.

From my previous accident which they wrote my car off, I had full body kits, rims, etc but since I didnt tell the insurance co about the mods, I only got OEM or market value of stock car.

[romiata]

I have GEICO and they have a sort of supplemental insurance addition. I told them what I have done on the Z from Honda (the Mugen kit) and it is covered. It added about $5/month, but that is ok for peace of mind should something happen to it....

As for my heavily modded Miata, I had it over insured because of bodykit, paint, wheels, seats, stereo, etc... After a few months of this, they wanted to see and inspect it due to underwriting. I decided then to uninsure it and deregister it with the state and leave it garaged for awhile. When I reregistered it, I didn't get the extra coverage this time. No questions about inspecting it, but also no extra coverage...

[TinTin]

first off. **** Statefarm.

second, a "mod" isn't an investment. Cars aren't an investment (unless you are buying vintage cars)

third, 95% of all the insurance companies I've ever talked to will refuse to insure a car thats modified. If you say your car is modified they won't touch you with a 10 foot pole. Cosmetic mods are ok but as mentioned, anything that changes the performance of the vehicle insurance companies get all bitchy.

I even was going to have problems getting rims for my car. My insurance company told me i wasn't allowed to change the car's specs out of stock. So i wasn't allowed to go from a 16" rim to a 17" rim according to their stupid rules. In all honesty, i fought on that one. I said that honda offers a 17" rim package for the car and i didn't want the honda rims i got my own but followed the same rim specs as far as dimensions for the most part and tire size, so they can't be pricks about it.

I inquired with my insurance company about "mods". We shouldn't say modified because we really aren't. My insurance company actually called me back and asked for a verbal confirmation that i did not do any of the modifications i was inquiring about. I basically told them that i had no performance modifications done to my car whatsoever. And that was that.

even if they say that lowering a car is a performance mod i'll just argue and say i think it looks better. Im not dumped, its quite reasonable. I even had a broker tell me once that lowering a car increases its chances of flipping. Insurance companies are the biggest scam artists of all.

I hate insurance companies so much. They take younger drivers money and give them garbage service. Tons of loopholes and dead end rules that make no sense. The general consensus with insurance companies is out of sight out of mind. don't tell your insurance company your car is "modified" don't tell them you're thinking of modifying your car (I did, and i was sketched for months after. Never doing that again. You never know what stupid clause they will throw at you.)

FU*K INSURANCE COMPANIES.

[GoHuskies]

Some insurance companies offer additional coverage for upgrades to the car but you must name them specifically as part of the policy and ideally keep paperwork to prove original value in case of loss.

The downside is the fine print eliminates most of the fun modding bits. The company I work for only allows additional coverage for wheels, electronics, and "exterior modification" which means really only decals or special paints jobs. No bodykits or power upgrades.

This is done to avoid issues when paying out for claims. Evaluating the loss of a car not the same as the value for lost or damaged aftermarket parts. Most companies would rather just limit exposure to risk by not allowing of spacing restrictions on what aftermarket parts of mods are covered.

[TinTin]

its a little different in canada than the states.

If i got into an accident i wouldn't expect my insurance to cover my aftermarket parts whatsoever. I have my OEM parts waiting back at home. Thats kind of the way it is in canada. at least for me. I never sell any OEM parts I've replaced. You never know when you might need them

[sleighman]

Years ago I had 17" cobra R wheels on a 1992 Mustang and the car got rear ended when parked. That guys insurance paid to fix the car and repainted the whole car but they would not cover the Cobra R. They paid $100.00 toward a replacement 16" pony wheel. I called my insurance and they advised they could not help me since I never told them about the change. Now I make sure to pay the extra $5.00 a month for add ons and even then they will figure out a way not to cover something.

[Ludercrz]

TOTALLY different in Canada, especially Ontario.

I am also with State farm cus i get better coverage for everything i have insured. but when i was younger I had my Prelude insured with Belair Direct and they FLAT OUT Cancelled my policy because my car was Modded and they said they don't insure cars which are modified. so BECAUSE i got cancelled my insurance rates with the new company i got Sky Rocketed.... I was NOT happy.

some companies will FLAT OUT not insure you if you have mods, I asked around after I had been cancelled and these were the companies that said no:

Belair Direct, TD Insurance, i then went to a Broker who represents multiple companies and they said only 1 of their companies would support me but the price they asked was SUPER high... I ended up going with the Co-Operators Group, but that was still kinda expensive.

Now with State Farm they will insure your car but your mods are not covered if they are "racing" mods or like CRZ-Canadian said, mods that change the safety of the car. (engine mods like Intake, Header, Exhaust... Suspension, Seat/Seatbelts, Steering Wheel, Brakes. That's all i can think of for now.)

I'm pretty sure you could add certain things to your Policy like Rims, Spoiler... some companies will insure sound systems too (up to a certain amount)

[gordonfc]

I'm insured with Allstate Canada, in Pickering, Ontario.

I just renewed my policy $2481 for 12 months.
Covers my CRZ, 2004 Volvo S80 AWD, 2006 Kawasaki 900 cruiser.

Age makes a difference. I'm 71, with no accidents since 1957.

I only do cosmetic mods.... arm rest, rearview camera, door sill protectors, tinting rear reflectors.