Modified Car Insurance: What It Covers, How It Works, and More

We all like to customize our cars to make them our own, but you might not realize that a standard auto insurance policy won’t cover most vehicle modifications and upgrades. Modifications can include anything from upgrading your rims or adding performance parts to common additions like bed liners or truck caps.

You may need modified-auto insurance to cover your vehicle’s total value, including any modifications and enhancements you’ve made. This specialty coverage pays for the higher cost of repairing or replacing your custom parts in case of an accident or total loss.

We’ll cover everything you need to know about modified-car insurance in the sections below.

Key Takeaways:

• Standard car insurance policies usually don’t cover vehicle modifications and custom parts unless you add specialty coverage.
• Insuring a modified car on a standard insurance policy without notifying the insurance company could mean you’ll pay out of pocket to repair or replace any custom parts.
• Some insurers — like Farmers, Progressive, PEMCO, and Hagerty — offer special coverage for modified cars or even spare parts.

How Does Modified-Car Insurance Work?

If you get into an accident or need to file a claim for a modified car under a standard car insurance policy, the insurance company may not cover the modifications. A modification is anything you’ve done to enhance or alter the vehicle after it leaves the factory, such as tinting the windows or adding custom rims.

When you add your new car to your insurance policy, it’s a good idea to ask your insurer if vehicle modifications are covered. Some insurance companies will cover up to a certain amount or specific modifications, while others may not unless you add custom parts coverage. If you want the modifications covered, your insurer will likely want receipts to prove the value and pictures as proof you modified the insured vehicle.

Can you insure a modified car?

Yes, you can insure a modified car, but not all auto insurance companies will cover the modifications. A standard auto insurance policy covers stock vehicles that are unaltered from factory specifications. A modified vehicle is changed to improve its appearance or performance, like replacing the stock bumpers with chrome bumpers.

Unless your policy explicitly covers the modification, your insurer may only cover the value of the original bumpers if the new bumpers get damaged in an accident, even if the new ones are worth more.

Do you need special coverage for a modified vehicle?

If you want your custom modifications and aftermarket parts covered, you may need special coverage to insure them on a standard auto policy. This coverage is often called custom parts and equipment coverage. You can add specific modifications under this optional coverage up to a certain dollar amount — which varies by insurer — to help pay for repairs or replacement if they’re damaged.

If you have a highly customized vehicle or high-value parts, an agreed-value policy may be cheaper and more beneficial. These policies are typically available through specialty insurers, like Hagerty and Grundy.

You and the insurance company will decide on the value of the modified vehicle and insure it for that value. You can usually also add special coverages, like spare parts and automotive tools coverage, for extra peace of mind.

What modifications aren’t covered by insurance?

Not all car modifications qualify for insurance coverage, even if you have a modification or custom parts endorsement. Examples include:

• Custom parts over a certain dollar amount (varies by insurance company)
• Snow plows or other equipment used for work purposes
• Suspension kits, including homemade kits greater than four inches
• Underbody lighting, nitrous oxide tanks, dark window tint, and other illegal modifications

Does modifying your car increase your car insurance rates?

Modifying your vehicle could increase your car insurance rates, especially if the modifications increase the value of your vehicle. The more it costs to repair or replace your car, the higher your insurance premiums can be. Before modifying your vehicle, ask your insurance agent how the changes could affect your insurance costs.

In some cases, modifying your car could lower your rates. For example, if you add security features like an alarm or security system, front or rear cameras, or daytime running lights, you could qualify for an insurance discount.

What if you buy a car that’s already modified?

If you buy a used car that’s already been modified, consider having it inspected by a mechanic before finalizing the purchase. Verify which alterations and modified parts it has so you can notify the insurance company when getting a quote. The vehicle’s value is a factor insurance companies use to determine the cost of insurance.

Depending on the insurer, you may need to provide pictures or other proof of modifications to get coverage.

How Much Does Modified Car Insurance Cost?

The national average car insurance cost is $129 per month for all drivers and vehicles, according to our analysis. But getting coverage for modified or custom cars can change how much you pay for auto insurance.

For example, PEMCO offers up to $500 in custom parts and equipment coverage, but you can pay extra if you need more. Hagerty is similar — if you purchase modified car insurance with spare parts coverage, you get $750 towards spare parts. If you want additional coverage, it starts at $1 more per month.

Factors affecting modified car insurance rates

Besides the standard factors used to determine all car insurance rates — like age and driving record — other factors can affect modified insurance premiums. These include:

• The vehicle’s value
• Specialty coverages, such as spare parts or custom parts and equipment
• Potential collision and comprehensive coverage requirements
• How much extra coverage you need to cover customizations

The Best Insurance Companies for Modified Cars

There isn’t just one best car insurance company for all drivers and vehicles, which is why we provide a list of several insurers to consider. Take a look at the list below to see which insurer might offer the right coverage for your customized car.

We compared coverage options, prices, customer ratings, and discounts to help you find the best modified-car insurance policy.

Farmers: Best for agreed-value coverage

Average premium: $154 per month

Compare.com rating: 4.1 out of 5

Trustpilot rating: 1.4 out of 5

BBB rating: A+

Pros:

• Wide network of local agents
• Custom coverage for aftermarket parts
• Plenty of available discounts

Cons:

• Higher-than-average rates
• Comprehensive and collision coverage required for modified-vehicle policies
• Below-average customer service ratings

Farmers offers highly customizable car insurance policies with a wide range of discounts to help lower premiums. Besides custom parts coverage to insure your modified vehicle, you can also purchase guaranteed-value coverage, which provides an agreed-upon value if your vehicle gets totaled. Car enthusiasts who add aftermarket parts, like a body kit, tires, or alloy wheels, should take a closer look at Farmers car insurance coverage.

Progressive: Best for custom parts coverage

Average premium: $109 per month

Compare.com rating: 4.2 out of 5

Trustpilot rating: 1.1 out of 5

BBB rating: B

Pros:

• Below-average premiums
• Special coverage for custom parts
• 24/7 claims and customer support

Cons:

• $5,000 custom parts limit
• Below-average customer service ratings
• No local agents

Progressive auto insurance is available nationwide, making it easy for modified-car owners in all 50 states and Washington, D.C., to get a car insurance quote. Progressive’s optional custom parts and equipment value (CPE) coverage includes up to $5,000 for your vehicle modifications, from custom paint to a new sound system. You can also add other specialty coverages, like pet injury and trip interruption coverage.

PEMCO: Best for Washington drivers

Average premium: $58 per month

Compare.com rating: Not rated

Trustpilot rating: 2.9 out of 5

BBB rating: A+

Pros:

• Extra custom parts coverage available
• Below-average premiums
• Other optional coverages available

Cons:

• Only available to Washington residents
• Few discounts available
• Must pay extra for more than $500 in coverage

Washington residents may want to consider PEMCO to insure their modified cars, as it boasts below-average premiums compared to some of the top car insurance companies. Besides the standard coverages, you can also include electronic key replacement or recoding coverage, as well as coverage for your camper, canopy, or tonneau cover. Though its custom parts and equipment coverage base is only $500, you can purchase more to cover all your vehicle customizations.

Hagerty: Best for show cars

Average premium: Not available

Compare.com rating: Not rated

Trustpilot rating: 4.1 out of 5

BBB rating: A+

Pros:

• Above-average customer service ratings
• Specializes in modified, custom, and classic cars
• Spare parts coverage included in base price

Cons:

• Must meet eligibility criteria
• Few local agents
• Average rates not available

Hagerty is a specialty insurer that offers coverage only for resto-mods, hot rods, street rods, pro-street, custom vehicles, and classic cars. Its base policy includes $750 in spare parts coverage, though you can buy more if needed. You can also purchase coverage for tools and automobilia. Hagerty provides an agreed-value policy with the option to retain salvage if you still want to keep your car after it’s totaled.

Modified-Car Insurance FAQs

We answered some common questions about modified-car insurance to help you understand how it works.

Do insurance companies cover modified vehicles?

It depends. Some insurance companies cover modified vehicles, but there may be limits on how much they will cover and what modifications qualify. Expect to provide pictures and receipts for proof of modification value to insure the parts. Some insurers may even request an in-person inspection before insuring the car.

Should you tell your insurance company about modifications?

Yes, you should tell your insurance company about modifications if you want them covered. A standard car insurance policy usually won’t cover them without custom parts coverage. Having the right coverage ensures you’re adequately protected and won’t be stuck with out-of-pocket repair or replacement costs.

Do modified cars have higher insurance rates?

It depends. Modified cars can have higher insurance rates if the cost to repair or replace the custom parts is more expensive than the original equipment manufacturer (OEM) parts. However, some modifications qualify as safety features, such as adaptive headlights or backup cameras, and could cause your rates to go down.

Does insurance cover aftermarket suspension?

No, a standard car insurance policy doesn’t cover an aftermarket suspension. The best way to get your aftermarket parts insured is to speak with your insurance company to find out about getting coverage and how it will affect your insurance premiums.

Methodology:

Data scientists at Compare.com analyzed more than 50 million real-time auto insurance rates from more than 75 partner insurance providers in order to compile the quotes and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.

All the quotes listed in this article have been gathered from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide drivers with insight into how auto insurance companies determine their premiums.

Sources:

1. Insurance Information Institute, “What determines the price of an auto insurance policy?,” accessed January 30, 2024.