Custom Car Insurance For Custom Cars

Classic CarsMany drivers find great satisfaction in modifying their cars to suit their individual needs or desires, and often a great deal of time and money is put into building custom cars. Adequate, custom car insurance for these automobiles should be an owner’s top priority, whether it’s a classic or antique car, or simply has custom rims, spoiler, and a body kit. Usually, functional alterations will trigger a change in how insurance policies are written and the price of premiums calculated, otherwise, your insurance company may not cover your additions beyond the stock car and parts.

Risk Categories

It is important to understand how insurance companies evaluate mods before shopping for coverage. If the upgrades are mainly cosmetic, such as for a show car, the insurance carrier will probably see it as a low risk. Custom cars might also prompt a change in the driver’s risk profile with a carrier.

If the modifications indicate the possibility of “risky” (read: racer) behavior (adding nitrous oxide (NOS) injectors, a cat back exhaust, performance chip, etc.) to the insurer, the driver may be put into a high-risk insurance policy where cheap rates are harder to come by.

Car Collectors

Collector, or show, cars are not usually driven much, and their drivers tend to be cautious to avoid damaging their car. In this case, investment protection is the most important factor. The insurance policy will determine where the collector’s car can be driven — parades, the street, shows — and still be protected.

Some policies only cover a limited number of miles per year; keeping the mileage very low will pay off in the cost of the car insurance. Housing the car in a safe location might also help with lower rates. Put an alarm system in the garage and cover any windows to be very safe.

Street Racing

Street RacingStreet racers are the second type of vehicle modification – one that is much riskier for the car insurance company. Street cars are often involved in accidents; they are driven fast (by risk takers), and have high rates of theft.

Engine upgrades, racing-profile tires, body kits, spoilers, performance chips, headers, exhaust and suspension systems, and extensive changes to other parts of the car would indicate that racing is a possibility and, therefore, a higher risk. Street racing is both dangerous and illegal. In consequence, car insurance rates on these kinds of customized cars are higher. The increases depend on the type of risk.

Other Modifications

Vehicle alterations can take many forms, and the type of change impacts the level of premium upgrades as well. Improvements in value mean that the car is more likely to be stolen, so mods that provide better security for the vehicle will probably mean that premiums will not change.

The risk of theft increases with the car’s value, and the owner will find that the premiums are likely to increase. Most insurance companies will look at other modifications — special exhaust systems, suspension changes, elaborate paint schemes — on an individual basis.

Spare Parts

Coverage for spare parts is a consideration in buying collector insurance because with older collector cars, parts may have to be replaced. Most companies recommend Custom Parts and Equipment coverage (CPE).

If you consider CPE, make sure to find out exactly what is and isn’t covered and the dollar limit per claim and per year. Standard insurance companies insure the actual value and will reimburse you for what the parts are worth, not the cost to replace them. Shopping for companies who understand this issue can avoid problems later and get you cheaper premiums.

Telling Your Insurer About Mods and Upgrades

Disclosing all upgrades made to a car is very important. Of course, drivers want to keep their premiums low and may not reveal these upgrades to their broker. If that is the case, the insurance adjuster is likely to void the policy if he or she sees undisclosed alterations after an accident.

Even modifications considered minor, such as a new set of alloy wheels, must be revealed to the carrier. Most insurance agents will ask if your car has “substantial customization” and the policyholder is required to detail those modifications.

Preparing For Policy Changes

If the modifications have already been made, the best strategy is to search for car insurance quotes online. When considering custom mods and upgrades, call your current company to compare rates. The carrier may have special policies or discounts available for a customized car, classic or antique. Some policies will cover all alternations, but some put a limit on the amount they will provide coverage for.

Special Custom Car Insurance

Shelby GT500There are insurers who actually specialize in custom cars. These auto insurance companies will be more knowledgeable about the impact of customization on value than standard insurers. Some collector or classic car insurance pay full cash value if the car is totally destroyed.

Because collector vehicle values often appreciate (going from classic to antique, for example), some policies take this into account. Typical collector policies may not even charge for increases in the coverage. On the same note, some standard insurers may not recognize that depreciation is not applicable.

Choosing Custom Car Coverage

Because custom cars fluctuate in value, insurance quotes and comparisons for these kinds of vehicles are difficult to get without some research. It should be possible to insure a vehicle for its actual worth. Specialized custom car insurance companies do understand the intrinsic values of custom creations. Their policy terms take into account that custom and collector automobiles can be very high-dollar items and need coverage specifically designed for them.

Often the owner will continue to customize the car, and an insurance policy must reflect the difference in value, and therefore, risk level.

Customizing Your Car For Affordable Insurance

Of course, it is also very possible to get cheap car insurance with some safety modifications. For instance, anti theft devices such as immobilizers and alarms, as well as tracking systems, Lo-Jack, and OnStar can significantly bring down a premium. Just make sure that when searching for anti theft products, to choose reputable products.

The bottom line for custom car owners is to be prepared to modify your auto insurance policy as well. The time and investment, not to mention pride of ownership, is well worth the effort to understand policy terms and to find a good, reputable company offering cheap rates for custom car insurance. On this last point, comparing rates is the only sure way of finding an insurer with the right policy and the lowest cost.