Mods and Resale Value vs Replacement Value
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Racer
Joined: Jun 2004
Posts: 260
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From: Phoenix AZ
Mods and Resale Value vs Replacement Value
Just curious how insurance companies look at a modded car in regards to its value in the event of a wreck (especially one that results in the car being totalled). If I have a vehicle whose resale value is $20k and I put $20k in mods into it and the vehicle is totalled, do insurance companies only insure and payout on the blue book value of the car or do they take into consideration the value of work performed on the car?
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Depends...................some companies will cover mods and you pay a premium for that coverage...that being said if you have receipts etc you may be able to argue for the $$$...Mean Green got $50K for his car when it was totaled...I couldn't F'in believe it but he did..about 13K over what they offered him
Team Owner
Joined: Jul 2001
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From: Various places in Southern California.
Two different situations. If you are talking about your own insurance company, you need to read the policy, as that will govern the payout. Most standard polices only pay for factory equipment, so you may need to buy an endorsement to cover your mods.
If you're talking about the other guy's policy when he hits you, they owe you for the value of the vehicle as it was just before the accident. There's no contract issue involved, as they are paying what their insured is legally liable for.
That said, many mods reduce value. Sorry to say it, but those chrome taillamp bezels and fender hash marks may look great to the owner, but they tend to reduce the value of the car, or at least not enhance it. Now when we're talking about a supercharger or something, that does add value, but usually nowhere near the purchase price of the mod. A good rule of thumb that we use as a STARTING point for the analysis is that the mods add about 50% of their purchase price to the value of the car.
If you're talking about the other guy's policy when he hits you, they owe you for the value of the vehicle as it was just before the accident. There's no contract issue involved, as they are paying what their insured is legally liable for.
That said, many mods reduce value. Sorry to say it, but those chrome taillamp bezels and fender hash marks may look great to the owner, but they tend to reduce the value of the car, or at least not enhance it. Now when we're talking about a supercharger or something, that does add value, but usually nowhere near the purchase price of the mod. A good rule of thumb that we use as a STARTING point for the analysis is that the mods add about 50% of their purchase price to the value of the car.
