Modified Car Insurance

You bought a truck and lifted it two inches. You put new wheels on your sedan, added a loud sound system or fitted a body kit. The car looks and sounds better, and you are proud of it. Then a thought arrives: does your car insurance cover all of that? In many cases, it does not, at least not in full, and some drivers only find out after a theft or a crash. This page explains how insurance treats modified cars, what custom parts coverage is and why telling your insurer is not optional.

What counts as a modification?

A modified car is any vehicle changed from its original factory specifications. What counts depends on the insurer, but common examples include:

• Appearance: custom paint, vinyl wraps, body kits, spoilers and tinted windows.
• Wheels and suspension: aftermarket wheels, lift or lowering kits and oversized tires.
• Performance: engine upgrades, turbochargers, exhaust systems and engine tuning.
• Interior and electronics: custom audio systems, screens, seats and lighting.
• Utility and safety: towing equipment, racks, extra lights, backup cameras and other safety equipment.
• Accessibility equipment: hand controls, ramps and lifts. These are still modifications for insurance purposes and should be reported. See our page on disability car insurance.

What a standard policy covers

A standard auto policy is built around the car as it left the factory. If your car is damaged or stolen, the insurer typically pays for original equipment and the car’s normal market value. Aftermarket upgrades are usually not included, or are only covered up to a small amount, unless you have added specific coverage. That means custom wheels, a premium stereo or a lift kit could be left out of a claim. Our guide on car insurance terms explains the difference between a car’s actual cash value and what you spent on it.

Custom parts and equipment coverage

The usual fix is an optional add-on called custom parts and equipment coverage, often shortened to CPE. It pays to repair or replace permanently installed aftermarket parts after a covered loss, such as a theft, fire or crash. A few things to know:

• It is typically added on top of comprehensive and collision coverage, so you need those first.
• It has a dollar limit, which varies by insurer. Some companies offer a few thousand dollars of protection, others more, and a few have very low defaults. Check the limit against the value of your upgrades.
• You may need to document the work with photos, receipts or an appraisal.
• It costs extra. Some sources estimate the added premium at roughly a tenth of the value of the parts, but it varies a great deal.

If your car is heavily modified or very valuable, a specialty insurer may offer an agreed value policy, where you and the company settle on the car’s value in advance. Our page on project car insurance explains agreed value in more detail.

Tell your insurer, every time

This is the most important part. Insurers expect you to disclose modifications, ideally before you make them or right afterward. If you do not, a claim can be reduced or denied, and in a serious case the policy could be cancelled or treated as void. You would then be responsible for the damage and any legal costs yourself. It is not worth saving a small premium increase to risk that outcome. Be specific: list what you have changed, who installed it and what it cost.

Will modifications raise your premium?

Often yes, but not always. Performance upgrades, such as more horsepower, can raise the price because the car may be driven faster and costs more to repair. Expensive parts also increase the cost of a claim. On the other hand, some changes can lower your price. Safety equipment, anti-theft devices and certain upgrades that make an accident less likely can earn a discount with some insurers. Changes that reduce a car’s value, such as removing items, may also lower the premium. The effect depends on the insurer and the type of change, so comparing quotes matters. Our guide on how to compare car insurance quotes shows how.

Watch for modifications that cause trouble

• Illegal changes. Modifications must comply with federal safety standards and local rules, such as noise limits on exhaust systems. Tampering with emissions equipment is illegal and can void your coverage.
• Failed inspections. A heavily modified car may have more difficulty passing a state inspection.
• Racing and track use. A regular policy does not cover racing or track days. Ask about separate cover.
• Lender rules. If your car is financed or leased, the contract may restrict modifications. See leased car insurance.
• Hard-to-find parts. Custom work can make repairs slow and costly, which affects rental car needs and claims.

If your car was stolen or damaged

Gather your receipts, photos and installation records and send them with your claim. Our guide on how to file a car insurance claim explains the process. If the car is declared a total loss, the insurer’s offer may not reflect your upgrades unless they were documented and covered. Read what to do if your car is totaled and the offer is too low for how to push back.

A checklist before you modify

• Ask your insurer how the change will affect your policy and your premium.
• Ask whether custom parts and equipment coverage is available, and what the limit is.
• Keep receipts, photos and the installer’s details in one folder.
• Make sure the work is legal and passes inspection.
• Decide whether you want collision and comprehensive coverage, since you will need them for the added protection. Read whether full coverage is worth it.
• Choose a deductible you can afford. See how to choose a deductible.

Common questions

Do I have to tell my insurer about small changes? It is safest to disclose anything that affects value, appearance or performance. Ask your insurer where its line is.

Will my custom stereo be covered if stolen? Only if it is covered under custom parts coverage or an endorsement. Without it, you may get little or nothing.

Can I be refused insurance for a modified car? Some insurers decline heavily modified cars, but others specialize in them. Compare several.

Your car is an investment, and the insurance should match it. Compare quotes and tell each company exactly what you have done to the car.

Written by the StateCarInsuranceUSA editorial team. Last updated October 27, 2026.

This page is for general information only and is not insurance, legal or financial advice. Coverage, rules and prices vary by insurer and state.