Insurance and Modifications
Thread Starter
Team Owner
Joined: Aug 2003
Posts: 38,314
Likes: 35
1. I did not get one dime for my mods. Despite having all receipts. In the end it came down to... they gave me full retail value for the car. I complained, they said, show us a car with comparable mods and we'll talk. Guess what. You can buy H/C cars all day long for retail (dealer lot) prices for used cars. As you all know there is a huge difference between retail and wholesale. They told me if I had a stated value policy like my old muscle cars it would have been different
2. My buddy realized this and called his insurance company (Geico) to get a stated value policy on his modded car. Guess what. They canceled him the next day.....
: 
Sorry I couldn't resist.
Le Mans Master
Joined: Nov 2005
Posts: 5,835
Likes: 6
Well, I am slowly beginning to understand the motivations of those who do extensive mods to their vettes. The mantra "let the mods begin" just doesn't make much sense to me. It's like it's a competition or something.
I also don't comprehend the insatiable thirst for higher hp in cars that won't ever see a track. ( except for bragging rights or street racing )
So I like to find a car that's what I want stock and keep it that way.
Adding to the two problems of cancelled insurance and cancelled factory warranties for mods is the seldom mentioned little item of illegality.
Lots of folks talk about headers and exhaust mods on their cars which may be against federal law, state law, or both. I suppose mods to anything that changes emissions might likewise be illegal-tunes, intakes, etc.
I always understood that Camaros and Mustangs were going to be cut up, altered, or just flat butchered by mods from day one.....but years ago I also noticed that most vette owners seemed to keep their cars stock.....almost like they were satisfied with them or something.....
that was an interesting article DSOM ...thanks.
I also don't comprehend the insatiable thirst for higher hp in cars that won't ever see a track. ( except for bragging rights or street racing )
So I like to find a car that's what I want stock and keep it that way.
Adding to the two problems of cancelled insurance and cancelled factory warranties for mods is the seldom mentioned little item of illegality.
Lots of folks talk about headers and exhaust mods on their cars which may be against federal law, state law, or both. I suppose mods to anything that changes emissions might likewise be illegal-tunes, intakes, etc.
I always understood that Camaros and Mustangs were going to be cut up, altered, or just flat butchered by mods from day one.....but years ago I also noticed that most vette owners seemed to keep their cars stock.....almost like they were satisfied with them or something.....
that was an interesting article DSOM ...thanks.
Team Owner
Joined: Oct 2001
Posts: 56,381
Likes: 79
Seems to be different opinions on this but I think the following is the general consensus.
1. It's not worth insuring performance mods because as previously noted ins. company's don't want you because you are high risk...therefore if they don't dump you then they will charge you enough to wish you hadn't asked in the first place. Theft is a given and it will be a loss. But remember...the cost of 1 or 2 years premiums may pay the replacement anyway...
2. The scary part is liability. If you are involved in vehicular homocide could you be denied liablity coverage?? I wouldn't think so unless its DUI...i know insurance company's have clauses in regard to this.
Would be nice to here from someone in the insurance industry.
1. It's not worth insuring performance mods because as previously noted ins. company's don't want you because you are high risk...therefore if they don't dump you then they will charge you enough to wish you hadn't asked in the first place. Theft is a given and it will be a loss. But remember...the cost of 1 or 2 years premiums may pay the replacement anyway...
2. The scary part is liability. If you are involved in vehicular homocide could you be denied liablity coverage?? I wouldn't think so unless its DUI...i know insurance company's have clauses in regard to this.
Would be nice to here from someone in the insurance industry.
The bottom line is you need to read your insurance policy. They can differ greatly based on state laws.
Heads and cam I wouldn't tell my ins co and just eat it if in I had to make a total claim. You have to pay to play, just have to decide how you are going to pay.
LPE twin turbos I'd find a company like Hagerty to insure that car.
Intermediate
Joined: Dec 2006
Posts: 49
Likes: 0
From: Wheelersburg Ohio
Insurance claims on altered vehicles
Interesting topic.
As one who works with attorneys to hold insurer’s feet to the fire, here is my two cents on the subject:
a) Most policies have an exclusion on modifications
b) The VALUE of a car is what’s being insured. If your mods don’t raise the value you could argue you haven’t increased the risk. Same as if your car was repainted a different color than the body tag implies. If you wrecked it would the insurer pay for the white factory color or the red aftermarket paint?
c) Insurers have a duty to verify the VIN, condition etc of the car they insurer. Most don’t take the time. If they didn’t ask the right question and failed to do their job of inspecting the vehicle, thereby missing mods that were in place and available for their inspection, they would be hard-pressed to claim you defrauded them.
d) Insurance policies are all-inclusive meaning that an insurer must pay for any claim that arises that is not specifically excluded. Like Shopdog said, “They can say anything that they like. But that's beside the point, if you are at fault in the accident, you're at fault. They have to pay if you're at fault because you were drunk, they have to pay if you're at fault because you had a stroke, they have to pay if you're at fault because you were just driving like an idiot. Etc. All the same. They insured you against civil liability when you cause an accident. Doesn't matter exactly how or why you caused the accident. They still have to pay (unless there are specific exclusions in the policy that apply, read the fine print).” I’d like to add that even stupidity is not excluded so they have to pay even when you do the dumbest things behind the wheel.
e) If you make mods that void your warranty, an insurer could legitimately argue that the car is worth less and refuse to pay full value in the event of a total loss. After a loss, they would probably recalculate the premium based on the lower value and return that portion of money as they deny that portion of the claim. Again, if they don't inspect the car or ask the right questions, they will have a hard time proving it was a deliberate act on your part to deceive them, especially when you can prove you made the car available for inspection.
David Williams
www.SafeCollisionRepairs.com
www.ConsumersGuideToAutoRepair.com
As one who works with attorneys to hold insurer’s feet to the fire, here is my two cents on the subject:
a) Most policies have an exclusion on modifications
b) The VALUE of a car is what’s being insured. If your mods don’t raise the value you could argue you haven’t increased the risk. Same as if your car was repainted a different color than the body tag implies. If you wrecked it would the insurer pay for the white factory color or the red aftermarket paint?
c) Insurers have a duty to verify the VIN, condition etc of the car they insurer. Most don’t take the time. If they didn’t ask the right question and failed to do their job of inspecting the vehicle, thereby missing mods that were in place and available for their inspection, they would be hard-pressed to claim you defrauded them.
d) Insurance policies are all-inclusive meaning that an insurer must pay for any claim that arises that is not specifically excluded. Like Shopdog said, “They can say anything that they like. But that's beside the point, if you are at fault in the accident, you're at fault. They have to pay if you're at fault because you were drunk, they have to pay if you're at fault because you had a stroke, they have to pay if you're at fault because you were just driving like an idiot. Etc. All the same. They insured you against civil liability when you cause an accident. Doesn't matter exactly how or why you caused the accident. They still have to pay (unless there are specific exclusions in the policy that apply, read the fine print).” I’d like to add that even stupidity is not excluded so they have to pay even when you do the dumbest things behind the wheel.
e) If you make mods that void your warranty, an insurer could legitimately argue that the car is worth less and refuse to pay full value in the event of a total loss. After a loss, they would probably recalculate the premium based on the lower value and return that portion of money as they deny that portion of the claim. Again, if they don't inspect the car or ask the right questions, they will have a hard time proving it was a deliberate act on your part to deceive them, especially when you can prove you made the car available for inspection.
David Williams
www.SafeCollisionRepairs.com
www.ConsumersGuideToAutoRepair.com
Melting Slicks
Joined: Sep 2000
Posts: 3,040
Likes: 0
From: North Liberty IA
St. Jude Donor '07
I'm sorry but C is just flat WRONG. Much of the rest is questionable, but I'll focus on C.
The insurer's offer is 'as it came from the factory'. You cannot expect them to have a mechanic check each car for mods. How would Geico, Progressive, etc. that sell over the internet accomplish that. If the cause of an accident was related to the modifications, they can, and will, deny the claim and it will be held up in court.
Your example of 'factory white' vs. 'repainted red' was a good one. Vin color code says white. You get white. You didn't pay an extra premium to cover repainted red. That's a modification that you would have to declare for it to be covered.
It's just like your homeowners. More than $5K in jewels? You better tell them or that's all they'll pay.
The insurer's offer is 'as it came from the factory'. You cannot expect them to have a mechanic check each car for mods. How would Geico, Progressive, etc. that sell over the internet accomplish that. If the cause of an accident was related to the modifications, they can, and will, deny the claim and it will be held up in court.
Your example of 'factory white' vs. 'repainted red' was a good one. Vin color code says white. You get white. You didn't pay an extra premium to cover repainted red. That's a modification that you would have to declare for it to be covered.
It's just like your homeowners. More than $5K in jewels? You better tell them or that's all they'll pay.
Safety Car
Joined: Dec 2004
Posts: 4,477
Likes: 2
From: Boca Raton, FL
St. Jude Donor '05-'06-'07-'08-'09-'10-'11-'12-'13-'14
BE CAREFUL!! This a topic way too familiar with me as I watched my H/C C5 get stolen from my driveway and out run the cops.
1. I did not get one dime for my mods. Despite having all receipts. In the end it came down to... they gave me full retail value for the car. I complained, they said, show us a car with comparable mods and we'll talk. Guess what. You can buy H/C cars all day long for retail (dealer lot) prices for used cars. As you all know there is a huge difference between retail and wholesale. They told me if I had a stated value policy like my old muscle cars it would have been different.
2. My buddy realized this and called his insurance company (Geico) to get a stated value policy on his modded car. Guess what. They canceled him the next day.
Lessons learned the hard way:
1. Don't park a Vette in the driveway. Or don't live in Miami I guess.
2. You mod for yourself. You don't get any money for them unless you take them off before you sell the car and sell them separately. If your car is stolen you are doubly screwed.
1. I did not get one dime for my mods. Despite having all receipts. In the end it came down to... they gave me full retail value for the car. I complained, they said, show us a car with comparable mods and we'll talk. Guess what. You can buy H/C cars all day long for retail (dealer lot) prices for used cars. As you all know there is a huge difference between retail and wholesale. They told me if I had a stated value policy like my old muscle cars it would have been different.
2. My buddy realized this and called his insurance company (Geico) to get a stated value policy on his modded car. Guess what. They canceled him the next day.
Lessons learned the hard way:
1. Don't park a Vette in the driveway. Or don't live in Miami I guess.
2. You mod for yourself. You don't get any money for them unless you take them off before you sell the car and sell them separately. If your car is stolen you are doubly screwed.
I have GEICO and they know I have heads, cam and a supercharger. I also have their mechanical breakdown policy. The added the heads, cam, headers and exhaust as riders and they are now covered for breakdown purposes at full value. They would not cover the SC.
Jeff
Burning Brakes
Joined: Mar 2006
Posts: 800
Likes: 0
From: Las Vegas Nevada
Just so everyone is aware. I am insured with AIG and they are GREAT. I didn't inform them that I had all the work done to my car.
So 2 months ago some asshat flips a u-turn in front of me (maybe 10 feet away) on the highway! I slam on my brakes but still can't miss him so I swerve and land on a curb and then onto desert landscaping (ie rocks lol)
So AIG asks, is all this stuff custom?? (racemesh grill, vynil stripes, corsa exhaust ect ect.) No I say, they reply "where can we buy replacements!!" Man I was happy with them. They covered EVERYTHING on the car, not only that they let me take the car back to my tuner and do the engine work (needed new intake and tune) at the tune of 95 bucks an hour vs the dealers 40 bucks an hour. I told them I wasnt comfortable with my dealer and they said no problem.
On top of all this they give a lifetime warranty on all work done on the car; mechanical, electrical, body ect.
As crappy as the accident was I love AIG and wouldnt give them up for the world.
So 2 months ago some asshat flips a u-turn in front of me (maybe 10 feet away) on the highway! I slam on my brakes but still can't miss him so I swerve and land on a curb and then onto desert landscaping (ie rocks lol)
So AIG asks, is all this stuff custom?? (racemesh grill, vynil stripes, corsa exhaust ect ect.) No I say, they reply "where can we buy replacements!!" Man I was happy with them. They covered EVERYTHING on the car, not only that they let me take the car back to my tuner and do the engine work (needed new intake and tune) at the tune of 95 bucks an hour vs the dealers 40 bucks an hour. I told them I wasnt comfortable with my dealer and they said no problem.
On top of all this they give a lifetime warranty on all work done on the car; mechanical, electrical, body ect.
As crappy as the accident was I love AIG and wouldnt give them up for the world.
CF Senior Member
Joined: Feb 2006
Posts: 23,313
Likes: 25
From: Tucson Arizona
Well, I am slowly beginning to understand the motivations of those who do extensive mods to their vettes. The mantra "let the mods begin" just doesn't make much sense to me. It's like it's a competition or something.
I also don't comprehend the insatiable thirst for higher hp in cars that won't ever see a track. ( except for bragging rights or street racing )
So I like to find a car that's what I want stock and keep it that way.
Adding to the two problems of cancelled insurance and cancelled factory warranties for mods is the seldom mentioned little item of illegality.
Lots of folks talk about headers and exhaust mods on their cars which may be against federal law, state law, or both. I suppose mods to anything that changes emissions might likewise be illegal-tunes, intakes, etc.
I always understood that Camaros and Mustangs were going to be cut up, altered, or just flat butchered by mods from day one.....but years ago I also noticed that most vette owners seemed to keep their cars stock.....almost like they were satisfied with them or something.....
that was an interesting article DSOM ...thanks.
I also don't comprehend the insatiable thirst for higher hp in cars that won't ever see a track. ( except for bragging rights or street racing )
So I like to find a car that's what I want stock and keep it that way.
Adding to the two problems of cancelled insurance and cancelled factory warranties for mods is the seldom mentioned little item of illegality.
Lots of folks talk about headers and exhaust mods on their cars which may be against federal law, state law, or both. I suppose mods to anything that changes emissions might likewise be illegal-tunes, intakes, etc.
I always understood that Camaros and Mustangs were going to be cut up, altered, or just flat butchered by mods from day one.....but years ago I also noticed that most vette owners seemed to keep their cars stock.....almost like they were satisfied with them or something.....
that was an interesting article DSOM ...thanks.
In the road course events I run their driver orientation program is taught by a State certified instructor and is considered driver's education. At their lower levels...competitive but un-timed, my insurance covers my car. The program itself provides tremendous liability coverage.
I am not concerned with losing portions of my factory warranty due to modifications. From what I learned about my insurance policy, if I do not insure my modifications for any increased value...essentially my car is insured based upon a stock Corvette's depreciated value. Insuring my modifications would place me into a special risk category and increase premiums accordingly. If I crash my car, I'm prepared to eat the cost of the modifications. I'm OK with that.
As far as modifications being illegal....perhaps but I know Corvette owners with headers and other modifications that routinely run through State emissions inspections with no problems whatsoever. Go figure.
I wouldn't be so quick to 'judge' others that modify their cars. I may not understand why you would own a high performance, 400hp Corvette but I wouldn't hold you in disdain for owning one. I imagine you enjoy driving your 400 hp Corvette. I enjoyed driving my stock Corvette immensely....I enjoy driving my modified Corvette about a hundred times more.
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Melting Slicks
Joined: Mar 2001
Posts: 2,423
Likes: 0
From: western colorado colorado
Will try and answer your question...Each and every insurance company CAN and many WOULD deny coverage if a modifyed car was involved in an accident or stolen...You MUST notify your company of any modifications, and let underwriting determine if they will cover the risk..Generally there will be an added premium to cover the modifications..And, think about this...Modded car hits pedestrian, serious long term injuries, insurance company was NOT notifyed about mods, insurance company declines coverages...Owner of car is in financial ruin....Notify your company of ANY mods, make sure you CYA....Yes i work for one of them..
Melting Slicks
Joined: Mar 2001
Posts: 2,423
Likes: 0
From: western colorado colorado
From auto policy :
Loss or damage NOT covered: If you use or permit the automobil to be used in a race or speed test, or for illegal activity.....
Also: Not covered if...
An applicant .
1 gives false particulars of the described automobile to be insured to the predjudice of the insurer
2 knowingly misrepresents or fails to disclose in the application any fact required to be stated therein
3 the insured wilfully makes a false statement or failes to fully disclose all information pertinent to said automobile...
Play it safe disclose, pay an extra premium to protect yourself..And if your Company wont insure you, then find one that will...
Loss or damage NOT covered: If you use or permit the automobil to be used in a race or speed test, or for illegal activity.....
Also: Not covered if...
An applicant .
1 gives false particulars of the described automobile to be insured to the predjudice of the insurer
2 knowingly misrepresents or fails to disclose in the application any fact required to be stated therein
3 the insured wilfully makes a false statement or failes to fully disclose all information pertinent to said automobile...
Play it safe disclose, pay an extra premium to protect yourself..And if your Company wont insure you, then find one that will...
Tech Contributor
Joined: Mar 2003
Posts: 12,094
Likes: 197
From: Colorado Springs, CO
St. Jude Donor '08-'09-'10-'11
Just shows you shouldn't always believe everything a financial reporter or insurance industry PR flack says. Fact is, nitrous systems are not "illegal in most states" (in fact some systems have CARB approval, making them 50 state legal, most of the rest are 49 state legal). The myth that nitrous systems are illegal is a PITA for those of us who do run nitrous. It is prudent to keep the pertinent approval documents in the car so if you get hassled you can prove you're legal.
If you get caught racing with it, the charge is speeding.
I am a retired police officer.