Modified Car Insurance: How Standard and Specialty Insurers Treat Mods
Standard auto policies generally cover modifications only in a limited way, and track or race use is usually excluded outright. Collector and enthusiast insurers typically take a different approach, building the value of your modifications into an agreed value policy. Below is how the two approaches usually compare, where the limits tend to fall, and how to find modified car insurance that fits how you actually use your car.
But if there is one thing we want you to take away from any insurance post: Everyone’s insurance situation is more unique than they think, and this blog post isn’t intended to be insurance advice. Our goal is to arm you with information to consider and questions to ask a licensed insurance professional if you have a modified car, whether for show, street use or because you track or race your car.
Does Car Insurance Cover Modifications? Modified Car Insurance Basics
Sometimes, but even when it’s a yes it’s often only partially – at least on a traditional carrier policy, and much more fully on a specialty, collector or enthusiast policy.
How Standard Auto Insurers Typically Treat Modifications
Traditional carriers (e.g., Geico, Progressive or State Farm) generally insure a car as it left the factory. Aftermarket parts are often excluded or capped unless you add optional coverage, usually called a custom parts and equipment (CPE) endorsement.
- Small built-in allowance. Some standard policies automatically include a modest amount for aftermarket parts. One large carrier, for example, includes up to $1,000 under comprehensive and collision.
- CPE endorsement for more. Many standard carriers offer a CPE add-on that typically raises coverage for modifications to around $5,000, though we’ve seen a few that go up to $10,000. Also, what can be covered by a CPE can vary by carrier. We suggest reviewing the specific language from your carrier to ensure your modifications qualify.
- Disclosure matters. Undisclosed modifications can lead to a denied claim, or in some cases a cancelled policy, so it’s generally wise to tell your insurer about every change.
CPE coverage is usually a good fit for lighter modifications: wheels, a stereo, lighting, a body kit or custom paint.
How Specialty, Collector and Enthusiast Insurers Typically Treat Modifications
Specialty carriers, such as collector or enthusiast insurance, generally write agreed value policies. You and the insurer settle on the car’s value up front, including what you’ve invested in modifications, and that figure is typically what’s paid on a covered total loss.
Many of these programs welcome modified vehicles such as restomods, replicas, custom imports, grassroots race cars and some high-horsepower builds, as long as the car and its use meet program guidelines. Eligibility usually depends on how heavily the car is modified, which modifications were made and how it’s driven.
Not all collector or specialty insurers accept all modifications. For example, some collector companies do not want you to track your car, so track centric modifications such as roll cages may not be allowed. Others may not want cars that include nitrous.
Modified Car Insurance Limitations: CPE Caps, Actual Cash Value and Usage Rules
The biggest limitation on a standard policy is usually the dollar cap on modifications; on a collector policy it’s usually how, where and how often you can drive the car.
| Feature | Standard policy with CPE (typical) | Collector / enthusiast agreed value policy (typical) |
|---|---|---|
| How mods are valued | Up to the endorsement limit, commonly about $1,000–$5,000 combined | Built into the agreed value of the whole car |
| Total loss payout | Actual cash value, which reflects depreciation | The agreed value, generally without depreciation |
| Common Documentation | Receipts and photos usually requested to add or claim mods | Documented list of mods and photos |
| Driving use | Daily driving generally allowed | Usually limited or pleasure use |
| Other vehicles | No requirement | Often requires a separate daily driver |
| Storage | No requirement | Often a locked, enclosed garage, though some programs are flexible |
| Track and racing | Generally excluded. On track coverage may be available by separate, third party policy. | Use is accepted by some carriers, but typically on track or race usage is excluded or requires separate policy. |
Common Limits on Standard Policies
- Coverage caps. Even with a CPE endorsement, coverage for all modifications combined is typically capped, often around $5,000. Builds worth more than that are usually underinsured.
- Depreciated payouts. Standard policies generally settle at actual cash value, so a heavily modified car with a low book value may pay out far less than its build cost.
- Excluded modifications. CPE riders commonly exclude illegal or homemade modifications and certain suspension changes. Track or race modifications such as roll cages and nitrous may also commonly excluded.
Common Limits on Collector and Enthusiast Policies
- Usage restrictions. Mileage caps, no commuting or daily use, and a requirement to own another everyday vehicle are common.
- Storage requirements. Many programs ask for enclosed, secure storage.
- Eligibility review. Powertrain modifications (e.g., forced induction or engine swaps) often get closer underwriting review, and some programs set minimum agreed values.
- Keeping the value current. The agreed value is generally fixed for the term, so adding modifications without updating it can leave you underinsured.
Track Car and Race Car Insurance: Roll Cages, Nitrous and Race Modifications
Track-oriented modifications raise two separate questions: whether the parts themselves are covered, and whether the car is covered while it’s being used on track. On a standard policy, the answer to the second is usually no.
Track Use Is Typically Excluded
Most standard personal auto policies now exclude losses on a track. Common policy language excludes racing or speed contests, high performance driving events (HPDE), driving schools, or any use of a surface designed for racing. Some of this wording is broad enough to exclude a slow parade lap. Many collector and enthusiast policies carry similar on-track exclusions.
Though it’s important to note that some traditional carriers, and even some collector and specialty insurers, may also considered track and motorsports use a unpermitted activity, which means they may not want you doing it at all, even though they don’t cover it.
Track Or Race Specific Modifications, Such As Roll Cage
A roll cage is generally treated as a sign of track or competition use. On a standard policy, a cage may draw extra underwriting questions, be excluded from CPE coverage, or even affect eligibility. Some owners have reported policy amendments that specifically exclude racing equipment such as roll cages.
Track use friendly specialty programs usually handle cages differently. Agreed value track car insurance can typically include permanently installed safety equipment, such as roll cages, in the insured value. However, not all specialty or collector companies will accept roll cages, particularly on street driven vehicles.
Vehicle With Nitrous
Nitrous oxide systems are usually viewed as a high-risk, competition-oriented modification. Standard policies may exclude nitrous systems from coverage, and some carriers may decline a car that has one. Enthusiast-focused agreed value programs are generally more open to power-adders, and some will cover vehicles with nitrous, provided they’re disclosed and documented, however, not all carriers will.
Coverage While On Track
Because the main auto policy typically stops at the track entrance, on-track risk is usually covered separately:
- Track day / HPDE insurance. Usually physical damage coverage for your car during an event, sold by the day, event or year, typically on track and in the paddock. Liability is often not included unless added.
- Storage, trailer and paddock policies. Typically aimed at trailered-only track and race cars that aren’t driven on public roads.
When it comes to track day insurance, modifications are often covered up to the agreed limit of the insurance. However, some track day insurance carriers ensuring you have proper documentation for our modifications is crucial. Some carriers require proof of modifications and value above a certain threshold. Others require you to disclose modifications first. However, be sure to check before purchasing track day insurance as while most carriers will cover modifications, there are some carriers who will limit what, if any, modifications they will cover.
How to Find Modified Car Insurance and Track Car Insurance
Finding the right coverage usually starts with matching the policy to how the car is really built and used, then working with someone who places these cars regularly.
- Document the build. It’s recommended you have at high level list of modifications and their replacement cost. The more details the better. Retaining receipts/invoices (where available) is also an option. It’s also generally recommended you have recent photos of the car showing the modifications. Specialty programs generally ask for the car’s base value and the value of its modifications separately.
- Read your current policy. Check the CPE limit, whether an agreed value option exists, and the exact wording of any racing, track or HPDE exclusion. Clarify uncovered use vs. unpermitted activity. This is particularly true for track or race uses.
- Match the policy to the use. Not all collectors, enthusiast or specialty carriers are a fit for all cars and situations. A mismatch policy to use could result in issues if you have a claim.
- Expect two policies for street and track. Street and on-track coverage are almost always written as separate policies, though there are some situations where they can be bundled.
- Work with a specialist agency. An agency that works with several enthusiast carriers can generally shop more programs than a single-carrier agent. Also, having an agent or agency that understands the nuance of your specific vehicle, modifications and how you use the vehicle may help you find the correct carrier(s) for your situation.
- Don’t Ask Don’t Tell/Hope Isn’t A Strategy. Simply relying on “my insurance companies doesn’t know” or “hopefully they are ok with this” isn’t a sound strategy, particularly when there are often options available.
The Bottom Line on Modified Car Insurance
Standard auto policies generally treat modifications as an add-on with a cap and treat track use as excluded. Collector and enthusiast policies typically protect the full build through agreed value, in exchange for limits on how the car is used and stored. Roll cages, nitrous and other race-focused modifications usually push a car toward specialty track car or race car insurance. Policy terms vary widely, so it’s generally best to review the actual policy wording and confirm coverage with a licensed agent before you modify the car or take it on track.
This article is general information, not insurance advice.
Informational Purposes Only
Every insurance blog post, including ours, always has a disclaimer. Always read your policy carefully. Despite this warning, so many people fail to do this. Just like Software License Agreements and Terms of Service, people tend to breeze through these legal contracts with little regard for what’s included. It’s pretty typical, but the risk of doing so is more than just the possibility of disappointment; it could cost you money. Lots of money.
Of course, we have to say it, what is or what is not covered is defined by your policy, not by what you read on the internet, heard in the paddock or were told by a friend who also has a track car. Our goal here isn’t to give you a list of what is or isn’t covered with your Umbrella (or any other policy for that matter). Our goal is just to give you some things to think about as you consider participating in on track activities, regardless of the event type. We hope you’ll use these topics to ask questions and engage the help of licensed insurance professionals to get questions about your specific situation answered.
