Modding = No Insurance?
04-02-2004, 08:53 AM
#1
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Modding = No Insurance?
From AutoWeek
"but she recommends informing your agent about any modifications, especially when you go from minor to major."
So they can raise your rates accordingly.
No Insurance Coverage: Forming A Policy Against Tuners
Insurance—Or Lack Of It—May Spell The End For Sport Compact Enthusiasts
By ANDREW LUU
Canadian Ron Shortt is a far cry from the fast and furious type: The 47-year-old Toronto man drives a 2002 Pontiac Sunfire back and forth to his job as a computer information technology specialist, and his driving record is snow-white clean—no accidents, no tickets.
None of that mattered when Shortt decided to dress up his Sunfire with off-the-shelf, bolt-on interior parts, special wheels, a trick exhaust and lowered springs. In response, his insurer of 15 years, State Farm, canceled his policy, citing the lowered springs as a big no-no.
As with muscle cars of yore, which faded away as much because of jacked-up insurance rates as the triple whammy of high gas prices, government emissions rules and safety regulations, insurance companies are embarking on a collision course with the booming population of drivers who insist on tuning their sport compact rides.
“The insurance industry may be able to accomplish what the police could never do,” says Shortt, “by making all these cars illegal to be on the streets because they can’t get coverage.” Shortt eventually wound up back with State Farm, but not before he reinstalled the factory springs and had the work verified by an insurance company adjuster.
Steve Budzinski of Ottawa also was dropped by State Farm because of performance upgrades to his Acura Integra Type-R. “My underwriter flat out told me it no longer wants to insure modified cars,” said Budzinski.
State Farm Canada spokes-man Derek Fee says the insurer has no blanket policy to refuse coverage to the sport compact segment, but he acknowledges some sport compact owners—particularly those involved in street racing—are a growing concern. “That subculture is causing difficulties for the rest,” Fee says.
In the United States, major insurers like AAA and State Farm say sport compacts aren’t a problem—at least not yet. State Farm spokeswoman Ana Compain-Romero says the company has no issues with minor upgrades such as lowered springs and tuned exhaust systems, but she recommends informing your agent about any modifications, especially when you go from minor to major. Changes discovered after the fact (say, after an accident when an owner is trying to collect against the policy) may void the coverage.
“Changes are subject to an agent taking a look and an underwriter deciding if we can extend coverage,” Compain-Romero says.
That kind of talk has some people worried Canada’s sport compact insurance woes could be a precursor of similar trouble in the United States. Steve McDonald, senior director of government affairs for the Specialty Equipment Market Association, says the aftermarket group is keeping an eye on the situation and gathering information.
“We’re not sure how widespread it is,” McDonald says. “We are alarmed by the possible implications of this.”
Meanwhile, auto manufacturers are powering ahead with plans for performance models, as well as building up their inventories of performance parts that can be used to turn their sport compact entries into tire-ripping street burners. Automakers contend they are merely responding to demand from customers who want performance.
Are they concerned about potential insurance pitfalls? “To a degree, yes,” says General Motors sport compact expert Bob Kern. “But 90 percent of kids say ‘So what?’ Most kids are dedicated to the cars and aren’t really reading the fine print. I think a lot of them don’t know they could invalidate their policies by modifying their cars.”
Insurance—Or Lack Of It—May Spell The End For Sport Compact Enthusiasts
By ANDREW LUU
Canadian Ron Shortt is a far cry from the fast and furious type: The 47-year-old Toronto man drives a 2002 Pontiac Sunfire back and forth to his job as a computer information technology specialist, and his driving record is snow-white clean—no accidents, no tickets.
None of that mattered when Shortt decided to dress up his Sunfire with off-the-shelf, bolt-on interior parts, special wheels, a trick exhaust and lowered springs. In response, his insurer of 15 years, State Farm, canceled his policy, citing the lowered springs as a big no-no.
As with muscle cars of yore, which faded away as much because of jacked-up insurance rates as the triple whammy of high gas prices, government emissions rules and safety regulations, insurance companies are embarking on a collision course with the booming population of drivers who insist on tuning their sport compact rides.
“The insurance industry may be able to accomplish what the police could never do,” says Shortt, “by making all these cars illegal to be on the streets because they can’t get coverage.” Shortt eventually wound up back with State Farm, but not before he reinstalled the factory springs and had the work verified by an insurance company adjuster.
Steve Budzinski of Ottawa also was dropped by State Farm because of performance upgrades to his Acura Integra Type-R. “My underwriter flat out told me it no longer wants to insure modified cars,” said Budzinski.
State Farm Canada spokes-man Derek Fee says the insurer has no blanket policy to refuse coverage to the sport compact segment, but he acknowledges some sport compact owners—particularly those involved in street racing—are a growing concern. “That subculture is causing difficulties for the rest,” Fee says.
In the United States, major insurers like AAA and State Farm say sport compacts aren’t a problem—at least not yet. State Farm spokeswoman Ana Compain-Romero says the company has no issues with minor upgrades such as lowered springs and tuned exhaust systems, but she recommends informing your agent about any modifications, especially when you go from minor to major. Changes discovered after the fact (say, after an accident when an owner is trying to collect against the policy) may void the coverage.
“Changes are subject to an agent taking a look and an underwriter deciding if we can extend coverage,” Compain-Romero says.
That kind of talk has some people worried Canada’s sport compact insurance woes could be a precursor of similar trouble in the United States. Steve McDonald, senior director of government affairs for the Specialty Equipment Market Association, says the aftermarket group is keeping an eye on the situation and gathering information.
“We’re not sure how widespread it is,” McDonald says. “We are alarmed by the possible implications of this.”
Meanwhile, auto manufacturers are powering ahead with plans for performance models, as well as building up their inventories of performance parts that can be used to turn their sport compact entries into tire-ripping street burners. Automakers contend they are merely responding to demand from customers who want performance.
Are they concerned about potential insurance pitfalls? “To a degree, yes,” says General Motors sport compact expert Bob Kern. “But 90 percent of kids say ‘So what?’ Most kids are dedicated to the cars and aren’t really reading the fine print. I think a lot of them don’t know they could invalidate their policies by modifying their cars.”
So they can raise your rates accordingly.
04-02-2004, 10:23 AM
#4
Photography Nerd
Yes I have no problem with paying extra to cover the cost of mods to my car but if they assume that I am going to be driving more aggresively and thus a greater risk to them and raise my rates a lot then that's not reasonable. Not like insurance companies are ever fair but if they double the cost of your insurance because you've got lowering springs that's crazy. What I don't get is why didn't he go to another company? My insurer (Meloche Monex) is fine with anything I do to my car. They had a supercharged 1000hp viper at the carshow a couple years ago and were actually targeting the tuner crowd.
04-02-2004, 10:29 AM
#5
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Thread Starter
Originally posted by Dan Martin
My insurer (Meloche Monex) is fine with anything I do to my car. They had a supercharged 1000hp viper at the carshow a couple years ago and were actually targeting the tuner crowd.
My insurer (Meloche Monex) is fine with anything I do to my car. They had a supercharged 1000hp viper at the carshow a couple years ago and were actually targeting the tuner crowd.
04-02-2004, 10:56 AM
#6
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I have a ticket on my record right now so I'm not going to be telling my insurance company about the mods on my TSX until the ticket is cleared from my record in October. In the past though they've been good with mods.
I told them about mods on my previous cars and they never raised my rates rates.
I told them about mods on my previous cars and they never raised my rates rates.
04-02-2004, 05:36 PM
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I'd actually love to find a policy willing to insure my car for stated value of my car and it's parts. You would think they would love that, the car isn't a daily driver, I'd be willing to pay more for insurance.
However, as it is right now it's best if I just insure the car as an Accord and take the hit on the parts if it gets stolen. The problem is no one has rates for insuring a car with modified suspension and aftermarket parts, and I'd be damned to let some adjuster tell me that TL type-S parts aren't legit on an Accord.
However, as it is right now it's best if I just insure the car as an Accord and take the hit on the parts if it gets stolen. The problem is no one has rates for insuring a car with modified suspension and aftermarket parts, and I'd be damned to let some adjuster tell me that TL type-S parts aren't legit on an Accord.
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04-03-2004, 01:35 AM
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Originally posted by MrChad
I'd actually love to find a policy willing to insure my car for stated value of my car and it's parts. You would think they would love that, the car isn't a daily driver, I'd be willing to pay more for insurance.
However, as it is right now it's best if I just insure the car as an Accord and take the hit on the parts if it gets stolen. The problem is no one has rates for insuring a car with modified suspension and aftermarket parts, and I'd be damned to let some adjuster tell me that TL type-S parts aren't legit on an Accord.
I'd actually love to find a policy willing to insure my car for stated value of my car and it's parts. You would think they would love that, the car isn't a daily driver, I'd be willing to pay more for insurance.
However, as it is right now it's best if I just insure the car as an Accord and take the hit on the parts if it gets stolen. The problem is no one has rates for insuring a car with modified suspension and aftermarket parts, and I'd be damned to let some adjuster tell me that TL type-S parts aren't legit on an Accord.
if your car fits under any of these classifications we have special rates (often much lower) than regular insurance. you may appraise and state the value of the car and we will insure it for that value. however the car has to be 25 years old to fit under the CHRO classifications and has to be garaged. as for the modified it also referres to oldder cars. a VIPER or NSX or say a Ferrerri would all be considered Exotic and can be new.
all have to be in good condition to qualify.
so we do have this program. however i dont think your accord qualifies.
having said that to the rest of you you need to understand a couple things, the rating system we use to rate cars insurance premiums has everything to do with the cost of the car, the price to replace and repair parts and the amount of damage it can do to another car.
we do have options to state the value of modifications you have done but go fast parts like NOS are a no no with any company for obvious reasons. people who modify their cars to make them significantly faster are running a couple risks.
for 1 thing adding power adders to a car suggests that the driver of the car would be a bit more reckless in the way they intend to use the car. 2 if you significantly increase the value of the car how can you expect the insurance company to cover all the additional parts you have added without collecting additional premium to justify the additional risk?
somthing important to point out about fast cars and racing. im guilty of it also but for any of you who take your car to the track. i can tell you that if your insurance company knew that you race the car they would cancil you in a heart beat.
also if you get into an accident and have things like NOS installed in the car chances are an insurance company could actually deny the claim.
i have even heard stories about people with clear tail lights on their car and had been rear ended. the tables now get turned around because the guy with the illeagle clear lights is using a non DOT approved lighting system and therefore is not giving the driver behind adequet warning to stop.
in this case the driver who was rearended got cited and the insurance denied the claim. talk about getting screwed!
but my point is that the insurance company charges a premium for a calculated risk. if you modify your car in such a way that it becomes a greater risk the insurance company has every right to cancil your policy. you may not realise it but every time you drive your car you are gambling with the insurance companies money.
now ask yourself. if you were the insurance company and you signed a contractual agreement with some punk rice boy kid that you would replace the cost of his vehicle and the potentially $500,000.00 in liability damages he could cause as a result of his poor judgement and recklessnes all for an easy 100 bucks a month would you lay your money on the table for that risk?
if you dont feel comfortable doing that with your money then you shouldnt expect your insurance company to feel comfortable about it either.
if you ask me we need to get these rice boy fast and furious kids off the streets. and if cancelling their insurance is what it takes to make people realise that the automobile (within certain limits) is designed for transportation of people and goods from place to place. not a personal art form and toy with wich to show ones manhood with.
it is in fact a weapon if not used in a responcible manner on a public roadway.
i never could understand the logic in changing your lighting equipment on your car for another desirable color just to be cool. they have laws for a reason and are forced to make new laws everyday because the lack of responcible teenagers that occupy the roads you and my family travel on.
my .02
04-03-2004, 10:29 AM
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Originally posted by Bass Mechanic
i never could understand the logic in changing your lighting equipment on your car for another desirable color just to be cool. they have laws for a reason and are forced to make new laws everyday because the lack of responcible teenagers that occupy the roads you and my family travel on.
my .02
i never could understand the logic in changing your lighting equipment on your car for another desirable color just to be cool. they have laws for a reason and are forced to make new laws everyday because the lack of responcible teenagers that occupy the roads you and my family travel on.
my .02
Studies have shown HID lighting is actually easier on the eyes of both driver and shared road viewers. Not to mention the clarity afforded by more direct sunlight quality lumens.
I guess we just shouldn't be allowed to use safer better lighting solutions.
04-03-2004, 10:38 AM
#10
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Originally posted by MrChad
As for modifing headlights, I'd like to know why HID retrofit kits are not DOT compliant.
Studies have shown HID lighting is actually easier on the eyes of both driver and shared road viewers. Not to mention the clarity afforded by more direct sunlight quality lumens.
I guess we just shouldn't be allowed to use safer better lighting solutions.
As for modifing headlights, I'd like to know why HID retrofit kits are not DOT compliant.
Studies have shown HID lighting is actually easier on the eyes of both driver and shared road viewers. Not to mention the clarity afforded by more direct sunlight quality lumens.
I guess we just shouldn't be allowed to use safer better lighting solutions.
if you had read that link at the top of this thread i belive it is clearly obvious that HID lights need a much more special lense assembly to direct the intense light where it should be and not where it shouldnt.
that said it seems some of the OEM ones need some improvement.
i would be willing to lay odds that retrofit kits arent designed and engineered as well as the OEM ones because it is clear that the beam needs to be just right.
04-03-2004, 02:57 PM
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I would never tell my insurance what I am going to do to my car, when my 01 maxima was totaled they reimbursed me on all my aftermarket items I installed by 50%. I got like 5k extra, it was awesome, and they didnt even ask for receipts. (allstate is who i have)
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