Does car insurance cover performance parts?

The question of whether or not car insurance companies will cover performance parts relies very heavily on individual state regulations and the insurance policies of the drivers involved.

This article will attempt to clarify some of the common factors that determine whether or not performance parts will be covered by your insurance company.

Examples of performance parts include cold air intakes, sport wheels, and turbochargers. Even when aftermarket parts are merely cosmetic, they are considered performance parts for insurance coverage.

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Do states require auto insurance companies to cover performance parts?

State car insurance regulations regarding how auto insurance companies pay claims are usually based on one of two methods, replacement cost or cash value.

• In a replacement cost scenario, the claim is paid based on what it would cost to return the car to the condition it was in before the accident.
• In the cash value scenario, the claim is paid out based upon the blue book value of that particular make and model.

In either case, the insurance company has great latitude when considering the cost of performance parts.

There are a small handful of states that specifically mandate performance parts be replaced with the same part where possible.

More often than not, states simply say the damaged parts must be replaced with similar ones guaranteed by the auto repair shop to return the car to its previous level of performance.

Less costly and lower performance parts may be used if a repair shop deems that your high-performance parts did not significantly improve the car over its factory defaults.

What can I do to ensure my performance parts are covered?

Regardless of the laws in your state, you should always take a proactive approach and discuss performance parts with your insurance provider.

Make sure that coverage for such parts is clearly spelled out in your policy in a manner that you can understand.

The insurance company exists to make a profit and will most likely not cover performance parts if it is not required to do so.

You should also always get and save receipts when modifying a vehicle with performance parts.

Even in cases where your insurance policy spells out specific coverage for your modified car parts, you’ll experience resistance in paying higher claims if you cannot prove to the insurance company that you paid for and installed them.

Without a sales receipt, there’s no way to verify where the parts came from and whether or not they were added after an accident.

Can I get a special car insurance policy that covers performance parts?

Although it’s probably not possible to get a specific car insurance policy for covering performance parts, you can find policies designed to cover high-performance cars in their entirety.

Such specialty auto insurance policies will generally cover the normal things like state liability minimums as well as replacement value at current market prices.

Even with specialized policies, it’s still important to keep receipts.

When you purchase this kind of specialized insurance, document your vehicle with photographs and videos.

Insurance companies are more likely to be cooperative if they can see what it is they’re covering.

High-performance parts can be a great addition to just about any vehicle. But since they are high investment items, make sure your insurance policy will cover them before being in an accident.

Read more: Does car insurance cover non-accident repairs?

Case Studies: Car Insurance Coverage for Performance Parts – Real-Life Examples

Case Study 1: Custom Parts and Equipment Coverage (CPE)

Sarah owns a high-performance sports car and has invested heavily in aftermarket performance parts to enhance its performance. Unfortunately, her car is involved in an accident, causing damage to some of the performance parts.

Since Sarah had opted for a car insurance policy with custom parts and equipment (CPE) coverage, her insurance company covers the cost of repairing or replacing the damaged performance parts. Sarah provides the necessary documentation, including receipts and proof of value for the parts, ensuring a smooth claims process.

The CPE coverage proves invaluable in protecting her investment in the performance parts.

Case Study 2: Modified Car Insurance

John owns a modified car with various performance upgrades. He takes his car to a track day event and unfortunately crashes into a barrier, causing extensive damage to the performance parts. In this scenario, John has a modified car insurance policy specifically designed to cover his vehicle and its performance enhancements.

The insurance company assesses the damage and agrees to cover the repair costs for the damaged performance parts. John’s policy includes provisions for modifications, ensuring that his investment in the performance upgrades is protected in case of accidents.

Case Study 3: Basic Car Insurance

Mike owns a car with aftermarket performance parts but opted for a basic car insurance policy without additional coverage for modifications. Unfortunately, his car is stolen, and the aftermarket performance parts are also taken. In this case, Mike’s basic car insurance policy only covers the original equipment manufacturer (OEM) parts of the vehicle.

Since the aftermarket performance parts are not covered, Mike is responsible for the cost of replacing them out of pocket. This situation highlights the importance of considering additional coverage options like custom parts and equipment (CPE) coverage or modified car insurance when owning a vehicle with performance parts.

Case Study 4: State Regulations and Replacement Cost Coverage

Emily lives in a state that mandates replacement cost coverage for performance parts. Her car is involved in a collision, resulting in damage to the aftermarket performance parts she added. Emily’s insurance company is required by state regulations to replace the damaged performance parts with identical ones.

As a result, the insurance company covers the full cost of repairing or replacing the damaged parts with OEM or equivalent performance parts. Emily benefits from the state’s regulations, which ensure that her investment in performance upgrades is fully protected.