Modifiable cars

Photo
Mike Brooks was able to get his insurer to pay more to repaint his wife’s truck.
Credit
Julie Keefe for The New York Times

NO matter what improvements you’ve made to your car — fancy wheels, neon glow, or a more powerful engine — one component is almost certain to lag in performance: your insurance policy.

Few drivers realize that aftermarket parts are generally not insured, so if you have an accident in your modified car, your insurer is not likely to reimburse you for the damaged add-ons. Even worse, in some cases insurers may deny the whole claim or cancel the policy.

Still, if you’re willing to pay more than you would for a standard policy, there are ways to get coverage for those add-ons from specialty insurers and even from mainstream ones.

It’s not that insurers are against modified cars, they are just not set up to handle them. Generally, the industry tends to shy away from covering modified cars because it gauges risk based on statistics. The bigger the pool of examples, the better the risk assessment.

“For O.E.M. vehicles, it’s easy, ” said Robert Horst, a lawyer in Blue Bell, Pa., referring to vehicles in stock condition. That’s because thousands of cars contribute to the database.

But one-of-a-kind modified cars don’t fit into a neat statistical category.

“When faced with a situation the underwriter has only faced twice in the past, rather than 2, 000 times in the past, they don’t want to take the risk, ” Mr. Horst, who represents insurance companies, said.

Modified cars were once uncommon, but sales of aftermarket parts for appearance and performance — spurred by television car shows from “American Hot Rod” to “Pimp My Ride” — have been increasing about 7 percent a year, reaching $37 billion in 2006, the most recent numbers available, according to the Specialty Equipment Market Association, an industry trade group.

Sometimes drivers will modify a car without telling the insurance company. Then after an accident, the company finds that the $20, 000 car it insured is now a $40, 000 car, and the owner expects coverage on losses that weren’t priced in the policy.