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Modified Car & Insurance --> MUST READ!

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Old 01-27-2005, 03:09 AM
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Modified Car & Insurance --> MUST READ!

Ok I will "try" and keep this brief...

Recently I have been given the opportunity to have some "serious" mods done to my G35 Coupe. Pretty much anything Nismo makes can go on the car. I can't get into to many details aside from saying it has something to do with promotion for Infiniti and Television. Anyhow, my list of items have been approved and apparently there is some new items not on the market yet that they may or may not be putting on my car. I know... pretty amazing right? Right!

So we were finalizing rim choice and then for some reason Insurance came up in the meeting. Suddenly I had some concerns and fears about what these mods would do to my premiums. So, thinking that the mods for the car are going to be about 10-15,000 dollars I decided to call my insurance company and let them know before I went ahead with the build up.

This is were it gets interesting... They first asked me what I was getting done to the car... I explained the entire pretence to them and also indicated that items being installed on the car were all "FACTORY" parts that anyone could buy them right over the counter and put them on a new car. Basically the warranty would be fully intact. The only horse power gains would be from the CAI and the exhaust. So I told them approximately 10-18Hp, perhaps a low estimate but for the sake of complication I went with this. They asked me if I would be altering the ride height of the car and I said yes... 1". (NISMO Coil over setup, quality manufacturer parts)

My insurance rep put me on hold and asked her manager for advice (I assume) she came back and told me my car would be un-insurable. Man I freaked out... Why on earth would my insurance company of 7 years deny me coverage on the car? I mean I am making the car better than stock. It will handle better, stop better and perform better. Apparently, I am changing the vehicles manufacturers specs and because of this they consider the car "modified". Ok, sure it is modified. I posed the question... If I had bought a another car with 300hp and a sport tuned suspension would you insure it? She said "yes". So what's the difference. She basically had no intelligent answer and recommended I call someone else.

Anyhow, after calling 4 insurance companies all of them basically said no they were not interested in insuring my car and took the time to explain that if I go ahead with the mods they would not cover me in the event of a claim. So what do I do now? Does anyone have any other insurance companies they deal with in Ontario Canada?

This is honestly a very big blow to the tuner market. The insurance companies are doing everything in their power to destroy an industry worth billions! Even if you put an exhaust system on the car they can void your insurance! Did you know that? CAI same thing! Anyhow, I am very angry about this and although I intended on keeping this post short I failed miserably. Below is a link to an article that basically sums up everything that happened to me today. At this point I am not sure what I am going to do with the TV show... What point is there modify my car if I can't get insurance for it?



FRUSTRATED!

BADG35
Old 01-27-2005, 03:22 AM
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as long as things are "perminately" attached they are covered, automatically. There is no need to even inform your insurance company.
Old 01-27-2005, 04:34 AM
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I'm just wrapping up a theft claim with my insurance. All they got was my after market stuff, carputer, xbox nothing that the car even came with except for the leather box with all the owners manuals in it. 100% covered under my auto policy. Thats State Farm here in Cali tho, dunno about up where you are.
Old 01-27-2005, 05:11 AM
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While I am not familiar with laws in Canada, I would think the it would still essentially come down to two things. The policy language itself and whether or not an insurer would choose to write the risk.

From what you are saying it appears to be the latter. You must understand that there is a difference in the general risk of a person who simply buys a fast car and one who modifies one to be faster. It's not attributed to the car itself, but rather the type of owner/driver you are dealing with. Someone who modifies their car, particularly to be faster, will generally be a higher risk type of driver. That being said, there are two problems with trying to insure this type of driver. Is the customer in question the type of risk the insurance company wants to insure? And secondly, do they even have a way to rate the risk? Most insurance companies determine rates based on known statistical factors. When you introduce a risk that they do not have very much data on, it becomes harder to insure. In either case, it usually ends up being a better business decision to choose not to write that risk.

Now as far as policy language, whether they cover the items will be dependent upon the wording in the policy itself. Some companies write the policies to have very broad coverage and tend to have more conservative underwriting practices which tend to do a good job of reducing this type of exposure. Companies that deal with higher risks more often tend to exclude or limit how they cover these risks. In most cases, these companies can endorse additional equipment at an additional premium.

And I really don't think insurance companies want to destroy the tuner industry. Insurance companies are in business to make money. If a particular risk does not fit in their business model, it likely wouldn't be profitable to write this risk. Keep in mind as big as the tuner industry is, the relative number of vehicles with any appreciable amount of tuner parts is very small. I work for a division of an insurance company that targets high risk insureds and even then the percentage of claims involving modified vehicles is very small.
Old 01-27-2005, 05:45 AM
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Quote:
Originally Posted by Diamond_Coupe
as long as things are "perminately" attached they are covered, automatically. There is no need to even inform your insurance company.
My last post explains this is not the case. Read your policy. I've worked for 2 insurers that have limits on aftermarket parts.

One thing I should add also is that a policy may not be able to deny your entire claim should they discover you have aftermarket parts. It reverts to the policy language. If there is some language that excludes any claim if aftermarket parts are on the vehicle then they can probably deny, but I would speculate even in Canada, this is probably not the case. They would likely still cover any liability to another party and any damages to OEM parts. But read your own policy to be sure. One possible xception to this is if you lie on the insurance application. I would be almost 100% certain that most insurance applications will state that if you lie on the application, the insurer can revoke the policy. Some companies enforce this more than others. If the application asks if you have a turbo on the car and you say you do not, but you actually do, should a claim arise, they may have grounds to refund your premium and revoke the policy. I know of one insurer that actually has this stated on their application.

I just read the article BADG35 linked as well and while insurance companies really don't care what you do with the car, people who race cars can end up presenting fraudulant claims should they damage their cars during a track event. This includes claims submitted as a result of mechanical and body damage. Damage that occurs to a vehicle is generally not covered by any policy if it occurs while the car is being raced. Sometimes simply for being in a facility designed for racing or practicing for a race. The NICB is monitoring street racing heavily as a result and consequently sharing info here. In this case, it is the bad seeds in the tuner crowd that is partly to blame as well. Not only are they claiming damage from racing, but also presenting fraudulent claims to finance their hobby.
Old 01-27-2005, 05:49 AM
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When I lived in California, I was insured with a company called Wawanesa. They only provide coverage in southern California and Canada. They acutally insured aftermarted parts such as custom paint and wheels for and additional premium. (Nothhing too drastic). They only downfall was that there was a limit to someithng like $2500 for wheels/tires and $5000 for paint. Still, the point is that there ARE companies out there that don't frown on aftermarket mods.
Old 01-27-2005, 06:22 AM
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USAA covered my highly modified CL down the last penny. I called them before hand and was told that it was not a problem. When I totaled the CL early last year all I had to do was provide recipes for all of the after market stuff. It was no big deal. I think it all depends on the insurer….some do and some don’t.
Old 01-27-2005, 06:46 AM
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I live in Ontario Canada where BADG35 lived. It is very tough to get insured here with privet insurance company. They basically don't want your money if your under 25 years old (like me). It took me about almost 10 calls to get a contract done, and its not even through an insurance company...it was through a broker. Of course i did not tell them about mod and blah blah blah because it would just take too much time to explain and im sure they will give me lots of b.s about it. I'm not even getting full insurance anyway, just 3rd person liability+theft. Full insurance coverage is just too expansive for me. To the extreme that I can buy another G with the money of insuring my current G for 5-6 years (What is the point of buying it then???). Plus, if you had a miner crash under deductable...you would even make a claim because its not worth it. Plus, if the crash is about $10,000 and you report through insurance, you would end up paying them back because they will raise your insurance for 5 years.

Well, all i got to say is that stupid Ontario government agrees to privatization of car insurance company and the entire extra expanse becomes local citizen's burden. That is what privatization do to society...(So lets all vote for Communist party so we dont have to pay for insruance, lol if there is one...)

Not like in B.C, there is only one car insurance company (CIBC), and the insurance in B.C cost about 3/5 less then here in toronto. If its not because of coming to university here...i would be moving to B.C. Cheaper insurance, better living quality, nice weather (only snow few times in winter), and Whistler mountain instead of little blue mountain hill.
Old 01-27-2005, 07:54 AM
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I had a similar problem here in New York. My car got totaled when a commercial van rear-ended me at 85mph. I walked away from the car fine, but well my car was done. So I set about discussing the coverage for my after market parts coilovers, rims, exhaust, supercharger, and such. Well they informed me if it was not stock with the car they would not cover it....what the F%^k? When I insured the car I explained that I would be adding after market parts, all street legal. That was a year earlier. Well good thing I taped the conversation, because I played it for the insurance representative. They explained they had modified their policy and it was my resposibility to read the policy through every 3-6 months. Well I was pretty pissed, so I handed the tape to my lawyer. Well 3 weeks later I got a check from both my company and the egghead who hit me insurance companies. The point, tape your conversations and be sure that you included the following "You understand I am taping this conversation for legal purposes".
Old 01-27-2005, 10:48 AM
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Hey guys, I want to thank you all for your feedback and would love to hear more from you...

A couple of things I need to mention...

1) I am not a risk! I am 29 years olds, married, own my own home, I have several muscle cars and have no tickets / claims and have never been in an accident (knock on wood) So, in my opinion the insurance companies I have spoken to are stereotyping me as a street hooligan. Hey I like the street guys but I do not participate in street racing, I think it's stupid and dangerous, just my opinion.

I told the insurance rep that the modifications I am doing to my car would only make the car better and perhaps match the performance from other cars that are currently stock but cost thousands more. Regardless of the insurance companies reasoning the fact still remains that I am stuck with the conundrum of whether or not I should tune my car. I was totally looking forward to it until I got the insurance hammer dropped on my head.

2) Does anyone in Ontario, Canada know of any insurance company that is willing to insure vehicles that have been modified... And don't forget everything I am doing is OEM factory parts and my warranty is still intact.

3) As stated in this article I posted earlier...

"They've put people between a rock and a hard place," said Morrow, adding that many people are choosing to fly under the radar in the hopes their insurance companies won't find out what they've done to their cars"

I don't want to be one of these guys so I took the responsible and honest approach and talked to my insurer... Their answer... Sorry can't insure your car. In my opinion they are uneducated companies that have no real statistic or demographics for people who own performance vehicles. They read the newspaper and see "TEEN DRIVER DIES IN ILLEGAL STREET RACE" and then blanket the entire tuner community which is very sad...

So, like I said... If I had of proceeded with the mods and had a loss I would be left holding the bag on an expensive G35.

BADG35

Last edited by BADG35; 01-27-2005 at 10:54 AM.
Old 01-27-2005, 10:57 AM
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BADG35,

I don't know if these insurance companies would be accepting of cars with modifications, but have you contacted Meloche Monnex (), Belair Direct or ING? I would try them. If not contact an Insurance Broker and hopefully they can find one for you.
Old 01-27-2005, 11:13 AM
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Quote:
Originally Posted by jruss9819
USAA covered my highly modified CL down the last penny. I called them before hand and was told that it was not a problem. When I totaled the CL early last year all I had to do was provide recipes for all of the after market stuff. It was no big deal. I think it all depends on the insurer….some do and some don’t.
did your premiums go up at all?
Old 01-27-2005, 11:19 AM
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i use clover group insurance (cgi). they're basically brokers that help u find the best appropriate coverage. i've been with them for years and have not let me down yet. my current vehicle coverage through cgi is with pilot insurance. i've never owned a highly modded car... so can't comment on coverage availability. but give them a call at . i guess it doesn't hurt to see what they say. also, my boss uses chubb insurance for his aston martin. they're the only company that would go ahead and insure his car (very nutty). he dropped royal sun alliance on all his vehicles and home for them. here's a link to find a broker near u:

hope it all works out.
Old 01-27-2005, 11:38 AM
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All you need to do is make sure you keep your receipts... The first exhaust I had on my car was flood damaged about a month after it was installed - I was reimbursed for the full amount of the exhaust AND the labor I was charged to install it... my insurance is through Allstate btw... so a word to the wise: KEEP YOUR RECEIPTS!!!
Old 01-27-2005, 11:39 AM
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I'm sorry, but saying that modding your car up will make it just like a stock, more powerful other car, makes no sense to an insurance company.

When a production car is made, it has to go through a very long process of being tested, certified, inspected, meeting standards, etc. From the insurance companies' perspective this means a stock car is a lot safer to insure than a car the some guy has swapped almost every component out of, and they have no idea of knowing how safe or reliable it is.

Also, I'm sure that a car loaded with $10k-$15k in Nismo parts would be a much higher theft risk in their eyes.

Basically, modifications mean unknowns....and insurance companies don't want to touch unknowns with a 10-foot pole.

Best of luck, and I really hope you find some way to stay insured, because I would love to see what you car ends up like!

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