Best Insurance for Modified Cars

Modified cars are vehicles with changes from the original factory specifications. Modifications are often done to improve the vehicle’s functionality and performance. In some cases, they’re simply for aesthetic purposes. Examples of car modifications include changing your rims, bumpers, running boards or even adding a powerful sound system.

Modifications may change your auto insurance needs and may increase your rates. However, this is not always the case. Insurance providers have different definitions of modification. It’s best to talk to your provider about any vehicle modifications you’ve done.

What Is the Best Insurance for Modified Cars?
What Are Modified Cars?
Do You Need Modified Car Insurance?
Frequently Asked Questions

Key Takeaways

Generally, a modification is any customization or changes from the car’s original factory specifications.

The best insurance for modified cars is a policy with custom parts coverage, which covers the cost to repair or replace permanently installed custom parts.

Modifications to a vehicle may increase car insurance premiums. However, insurance providers have different definitions of what is considered a modification.

What Is the Best Insurance for Modified Cars?

The best insurance for modified cars is one with custom parts coverage. Find out if the company offers this add-on coverage when looking for auto insurance. It covers damages done to permanently-installed custom parts.

Before purchasing a policy, make sure you understand all terms and features included. It would also help to compare quotes from different modified car insurance companies to find the one that offers the best deal based on your needs and circumstances.

Companies With Add-On Insurance for Modified Cars

Company	Description
21^st Century	The company offers custom parts coverage as an add-on. This covers damages to equipment, not in the vehicle manufacturer’s standard.
Allstate	Policyholders may opt to have custom parts coverage in their car insurance for $102 per year. This covers losses to custom equipment due to a comprehensive type of accident.
Elephant	Elephant policyholders automatically get up to $1,000 in custom parts and equipment coverage (CPE). For higher coverage, a CPE add-on can be purchased as part of a comprehensive and collision policy.
Esurance	CPE coverage offers protection for aftermarket updates to the policyholder’s car. This add-on coverage protects against damages to modifications not installed by the manufacturer.
Farmers	The custom parts coverage is an add-on that policyholders can get as part of their comprehensive and collision auto insurance. It pays for the repair or replacement of aftermarket equipment.
Progressive	Policyholders can purchase CPE as an add-on to get coverage for the repair or replacement of an item added to their car, or those considered after-market accessories.
The General	Typically, policyholders only get coverage for the original equipment included by the manufacturer. To protect modifications, they can opt to add on custom parts coverage.

Use MoneyGeek’s quotation tool to get an idea of the cost of your insurance premium if you add custom parts coverage.

What Are Modified Cars?

A modified car has customizations that aren’t part of the original factory specifications. Modifications may refer to any added or aftermarket parts, including custom paint jobs or changes to the car engine.

Not all changes add value to a car. But generally, modifications can increase insurance premiums.

Additionally, modified car insurance companies may also have different definitions of modifications. That said, there are changes to cars that are commonly considered modifications. These include the following:

Rims
Bumpers
Custom Paint Jobs
Running Boards
Truck Bed Liners
Fuel System Upgrades
Sound Systems
Carpeting and Insulation

Talk to your insurer to determine whether the changes you’ve made to your car are considered modifications. If you bought a car that’s already been modified, inform your insurer. Insurance companies don’t automatically assume there are modifications.

MONEYGEEK EXPERT TIP

While modifications are often done to improve the car’s functionality or performance; they aren’t always for the better. In some cases, modifications may lower the actual cash value of a car.

Should You Tell Your Insurer About Modifications?

The best way to ensure proper coverage is to inform your insurance provider about any modifications to your car. You should also let your insurer know if you bought a car with existing modifications. Withholding this information could invalidate your policy.

For example, if you get into a car accident and the other driver decides to file a claim with your provider, and your insurer finds out you have an undocumented modification, your policy may be invalidated. That means you’d have to pay out-of-pocket.

Does Modifying a Car Increase Insurance?

Typically, modifying a car increases insurance costs. That’s because of the added value to the vehicle. Other factors may also be considered. For example, modified cars may be more likely to get stolen. If the customization is a more powerful engine, the car may also be prone to speeding.

That said, certain modifications may lower the value of a car. It’s always best to talk to your insurer and discuss the changes to your vehicle.

Do You Need Modified Car Insurance?

Standard car insurance doesn’t usually cover modified car parts. Car owners have to purchase custom parts coverage. In most cases, this is offered as an add-on.

Not getting modified car insurance can lead to out-of-pocket costs. Additionally, failure to announce modifications to your insurance provider can cause your policy to be void.

Try an Agreed Value Policy

You may want to consider an agreed value policy if you have a modified car. This policy allows the insurance provider to settle the car's worth and any modifications.

Your insurance company and an appraiser will decide on the value of your car. The value includes the cost of a total loss of your modification. Instead of just the car’s actual cash value (ACV), your policy will cover the agreed-upon settlement account in the event of an accident.

Frequently Asked Questions

Your insurance coverage needs and policy costs may be affected if your car has modifications. MoneyGeek answers frequently asked questions to help you better understand auto insurance for modified cars.

What is a modified car?

Insurance providers may have different definitions of what a modified car is. But generally, it’s a vehicle with customized parts or changes that aren’t part of the original factory specifications.

What are the best companies for modified cars?

The best modified car insurance companies are those offering custom parts coverage, which is often an add-on that covers the repair or replacement of modifications.

Does modifying my car increase my insurance?

Modifying your car usually increases your insurance premiums because of the added value. However, some modifications may lower your car’s actual cash value.

Are modified cars expensive to insure?

Car modifications can increase the value of your car. Modified parts also tend to be more expensive to repair or replace. Due to the changes in your coverage needs, a modified car may be more expensive to insure. That said, there may be modifications that don’t lead to higher insurance premiums. The best way to check is to talk with your insurer.

About Mark Fitzpatrick

Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.

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