Insuring modified and classic cars: What you need to know
Modified and classic cars are more than just a means to get you from point A to point B – they’re passion projects and prized possessions. Whether you’ve added custom wheels, upgraded the engine, or restored a vintage vehicle, it’s important to make sure your insurance policy fully reflects its value and unique features. This guide explains how to properly insure a modified or classic vehicle.
What qualifies as a classic or modified car?
A classic car is typically 20 years old (or older), in good condition, and driven infrequently (e.g., for exhibitions or leisure).
A modified car is one that has been altered from its original factory condition. This includes performance upgrades, cosmetic changes, suspension lifts, sound system enhancements, and more.
Even if your vehicle isn’t a classic, certain upgrades may warrant additional coverage.
Standard vs. agreed value coverage
There are two main ways insurers determine the value of your vehicle:
Actual Cash Value (ACV)
Your insurer pays the depreciated value of the car at the time of loss.
Agreed Value
You and your insurer agree in advance on the value of the car, based on documentation and appraisals. This is ideal for restored or customized vehicles.
Agreed value policies ensure you receive a payout that reflects your vehicle’s true worth, not just what the general market thinks it’s worth.
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get a quoteCommon modifications that can affect your coverage needs
These types of mods are worth considering when you’re selecting your car insurance coverage:
- Performance mods: Engine swaps, superchargers, performance exhaust systems
- Cosmetic mods: Custom paint jobs, body kits, lighting, wheel upgrades
- Interior mods: Aftermarket audio systems, reupholstery, racing seats
- Structural mods: Lift kits, roll cages, upgraded brakes or suspension
Most standard policies do not automatically cover these additions. You’ll need to disclose them and potentially purchase extra coverage.
How to add coverage for aftermarket parts
To protect your modifications, consider a Custom Parts and Equipment (CPE) endorsement or a specialty classic car policy. These options allow you to:
- Insure specific customizations beyond standard vehicle value
- Choose higher coverage limits for high-end modifications
- Avoid disputes over valuation in the event of a claim
Insurers may ask for receipts, photos, or appraisals when adding this type of coverage.
Documenting your modifications
Documentation is critical for both valuation and claims. Keep a file with:
- Receipts for all upgrades and parts
- Before-and-after photos of the vehicle
- Appraisal documents if available
- Work orders from mechanics or customization shops
Report major modifications to your insurer proactively, don’t wait until after a claim.
You’ve put time and money into your car – make sure it’s fully protected. Talk to your insurer about custom and classic car coverage options today.