Aftermarket Parts and Car Insurance: Are You Covered?

You've taken your favorite car and tricked it out. New paint, new coilovers, new wheels and tires, and an awesome sound system. Your ride went from about $30,000 ride to a $50,000 joyride!

But, without the right amount of insurance, you'd be in trouble if involved in an accident. Even if you've spent hundreds of hours and thousands of dollars customizing it, it's just an everyday car with OEM to your insurance company, so you'll only get an everyday payout from your insurance policy unless you've added coverage!

Here's how to decide whether you're protected or you need to add additional insurance.

Are My After-Market Parts Covered?

If you opted for liability coverage only -- the cheapest coverage available -- you're not covered. Liability coverage only protects you from a lawsuit if you hit someone. In a collision that you are responsible for, you have zero coverage on your vehicle and are responsible for all repairs. 

For coverage that includes having your car repaired or replaced, you need collision and comprehensive coverage on your policy. Collision covers fixing physical damage to your car when you hit something or someone who is insured hits you. Comprehensive coverage covers theft and damage to your car from a variety of occurrences. Both of them will pay the actual cash value of your car if it is totaled, but the cash value is the cost to replace it with a car similar to the one you were insuring.

If you haven't added the aftermarket extras you installed to your policy, insurance policies will generally only cover the original equipment. With some insurance companies, the collision and comprehensive coverage will replace a small amount of aftermarket parts, typically up to $1,000. It's a good idea to take photos and keep receipts for any of the extras you have added, in case you need proof.

But many other policies will not cover any aftermarket extras, unless you purchase special coverage. So, if you've shelled out $10,000 or so to make your ride look great, you need to consider extra coverage.

What kind of coverage do I need for aftermarket parts?

Coverage for custom parts and equipment (CPE) isn’t particularly expensive, especially if you’re under 25 and already paying the highest rates due to your age. Most drivers will pay only a few dollars a month for $5,000 coverage.

But you can’t buy CPE by itself; you must also carry collision and comprehensive.

Agreed-Value or Stated-Value Coverage?

An agreed-value policy means you and your insurance company agree ahead of time exactly what the payout will be if your car is stolen or totaled. Your premium is based on that amount.

A stated-value policy means you decide the value of your car. But unlike an agreed-value policy, you're only buying as much coverage as you can afford, rather than insuring the car for its full worth. This policy typically has a provision that allows an insurer to pay out actual cash value instead, if that amount is less.


If you have invested time and money in your vehicle and need to look into additional coverage, call SAV-ON at 888-867-2866 and one of our agents can help you get the right amount of coverage for your 'baby'.

Source: www.carinsurance.com