Best Insurance for Modified Cars

Generally, standard auto insurance doesn’t cover modified cars. Custom parts coverage is necessary to protect your modifications. With this, the cost to repair or replace your customizations is covered. Suppose an owner of a modified car doesn’t have this coverage. In that case, they’ll only receive the actual cash value of their vehicle minus the modification cost in the event of an accident.

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Last Updated: 9/24/2022
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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.

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Key Takeaways

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

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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.

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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
  • The company offers custom parts coverage as an add-on. This covers damages to equipment, not in the vehicle manufacturer’s standard.

  • 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 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.

  • 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.

  • 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.

  • 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.

  • 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.

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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.

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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.

About the Author


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Mark Fitzpatrick is a senior content manager with MoneyGeek specializing in insurance. Mark has years of experience analyzing the insurance market and creating original research and content. He graduated from Boston College with a Bachelor of Arts and Johns Hopkins University with a Master of Arts.