In part 1 of this series we spoke about the possibility of having your car declared a total loss and not getting enough money out of your comprehensive or collision insurance to pay your auto loan balance. The result? You’d either have to pay the difference out of pocket or have had GAP insurance in place to cover it for you.
With that in mind, what happens to any money you’ve spent personalizing your car to fit your liking after it’s totaled?
It’s not uncommon for vehicle owners to customize their cars with aftermarket modifications to fit their lifestyles. Whether throwing on custom wheels, installing an expensive sound system or a camper top, your customizations may not be covered by your existing insurance policy, or the coverage may at least be limited.
Fortunately, many insurers include protection on policies or offer additional coverages that can pay for the damage or theft of aftermarket parts.
A number of vehicle owners “hook up” their cars, but many may not think to insure against those hook-ups getting damaged or stolen and may assume that their current policies will automatically cover it. In some cases this may be true; but if it’s automatically covered, it may not be for the full amount.
For example, on a Progressive auto insurance policy, if you have comprehensive and collision coverage, it includes $1,000 in what they call Custom Parts and Equipment (CPE)/Accessory coverage (may not be included in some states). This covers loss to items such as permanently installed equipment or alterations to the vehicle. However, $1,000 may not be enough to pay for aftermarket modifications, and Progressive offers policyholders the option to purchase up to $4,000 in additional protection for an extra premium.
The coverage for aftermarket modifications or installations typically include but are not limited to losses for:
Other carriers like Progressive may also include a limited amount of coverage on comprehensive and collision policies for car customizations or the option to pay extra to cover them.
Whether you’re planning on using custom-parts coverage built into your comp and collision coverage or purchasing separate coverage, make sure to understand your deductibles. If you have a customization worth $500 but have a $500 deductible on your policy, the loss won’t be big enough for your coverage to kick in.
So if you decide to throw in a few thousand dollars to hook up your ride, you may want to consider insuring your investment. There aren’t many things much worse than having those modifications destroyed after a total loss and having to fork out the dough to replace them, or not being able to afford to replace them.
Keep in mind that this type of coverage can also kick in even if your car isn’t totaled. So if you get in a less serious accident and your modifications are damaged or destroyed, it’ll still be covered up to the limits you purchased.
