CarSeekBlog

While it’s true that there’s nothing like a brand new car, sometimes it’s almost as good to modify an existing ride for better performance. Most people do this with the addition of aftermarket parts, and that’s fine, but it’s important to remember that anything you change on your vehicle, also changes its profile from an insurance statistics point of view. This means that it is vital to consult your car insurance company or agent before you add anything much beyond a steering wheel cover.

Some aftermarket parts, which are often referred to as modifications or “mods,” carry more risk than others of voiding your policy, or not being included in repairs after an accident, so it’s important to be aware of what you can and cannot do.

Here is a list of the most common types of aftermarket modifications, with notes where extreme caution is advised:

• Wheels: Upgrading to alloy wheels may make your car look really spiffy, but it’s going to cost you money on insurance, as well.
• Suspension: For the most part, a drop of 30-40mm won’t affect your insurance much at all, but anything lower – or jacking your car up – will trigger a premium increase at the very least. This isn’t a part, of course, but it is a common modification.
• Security Devices: If you do upgrade the sound system in your car, consider adding some kind of anti-theft device as well. Whether it’s an audible alarm system, a tracking device (think LoJack), or an engine immobilizer, aftermarket additions of this sort generally make your insurance premium lower. One thing to avoid, however, is kill switches, which are often considered “illegal.”
• Interior: Generally speaking, interior alterations are not an issue, though an expensive stereo or GPS system may cause your premium to go up a bit.
• Engine: Anything you do to your car’s engine could potentially be a problem with your insurance company. Most insurers will allow induction kits and the like, but most will also void your policy if you even mention “chipping.” Be very careful.
• Brakes: Increasing the size of the discs and calipers in your brake system can be a red-flag to insurers, but upgrading the quality of the discs without changing sizes is generally fine.
• Body: This includes everything that alters the exterior of your car, from pin-striping to adding a rear-spoiler, as well as changes to the head- and tail-lights. Changes to the paint are not generally an issue, but even a rear spoiler may be considered a “kit” (with no differentiation between it and a full-body kit) by some insurers. Where lights are concerned (head, tail, brake) be sure that the replacement lights are legal and that they meet minimum safety requirements.

Disclosure is Imperative
If, at this point, you’re thinking that it may be better not to talk to your auto insurance company, lest your rates increase, think again. You must disclose any alteration you make, or plan to make, to your insurance company. If you do not, you may face two possibilities if your car is stolen, vandalized, or damaged in an accident:

1. Your parts will not be replaced. If your insurer isn’t aware that you have aftermarket parts on your car, they will assume responsibility only for replacing the standard parts. You could lose a significant amount of money.
2. Your policy may be voided. In some cases, not disclosing aftermarket parts, especially engine or suspension alterations, may make your insurance company refuse to pay anything. In this case, you could be out a car, as well as liable for any medical expenses for the other driver in an accident you caused.

Whether you remain insured under your current policy, or make so many (or such extreme) modifications that you must pursue specialty insurers, remember to document all of the alterations you make to your car, with pictures if possible, and then tell your insurance agent.

When it comes to aftermarket parts, full disclosure equals full coverage.

Filed under: In the News, Insurance by Mel