Questions about aftermarket parts and insurance answered..
 

I have been on many forums, supraforums, my350z, g35, etc.. And I always run across threads about this topic. Well I work for an insurance carrier and I am an adjuster and deal with A/M items, policies, interpretation etc... so I wanted to share my minimal knowledge about this to others because there are many confused, misperceived notions about coverage to a.m items

Please keep in mind, that all policies are different and different coverages apply to different people/police. I urge you to read your policy to grasp what is or is not covered for you in particular.

hopefully I can help shed some light on this topic. I am an adjuster and I also investigate fraud. I deal with Total Loss Auto values regarding thefts, vandalism and Fire losses. I also investigate them. Insurance policies are never fun, but READ your coverages and **EXCLUSIONS. Most companies are not going to cover any aftermarket items installed on your vehicle unless you have provided receipts and or put extra endorsements on them. Which means higher premium. You are adding thousands of dollars to a vehicle that is no longer OEM and rates are based on unmodified vehicles. Your premium has to do with the exposure of any losses you might endure. SO in turn, the more value on your vehicle, the higher exposure, the highter the risk, therefore the higher the premium. Some policies have a limited amount, like an additional 1K for a/m parts and no more. While others exclude them all together which is typical.

Some tips:

check your policy under the COVERAGE FOR YOUR AUTO and read the coverages AND exclusions. Read any extra endorsements or limits attached to your policy. If you are confused, ask your agent. (but really your agent might not know because they are licensed to sell, not handle or adjust claims so you will run into agents that might not really know. Just keep in mind what they told you because if they told you wrong, and you file a claim and it is wrong per your agent they can investigate coverage and possibly extend on an agent error. Agents have insurance too for this kinda stuff.)

If you don't report your a/m items to the insurance company, they are not going to deny you coverage all together for a loss, just to the a/m parts (although they will send a risk advice if they find out during an accident with all the stuff on there and exposure to possibly premium increase or cancellation might apply) ultimately, they will just not pay for the a/m items and pay for the repairs on OEM parts, or actual cash value of the vehicle at time of the loss.

Sometimes, there are policies that cover a/m items but only those installed in a factory opening that is an option you could have gotten from a dealer. IE NAV. Or the items must be permanently attached to your vehicle. ALL policies will have examples or definitions so pay attention that as well.

Another method is that they will consider receipts and what you have done but will have to figure out what is in EXCESS of the OEM product you removed. Just because you put custom stuff on your vehicle doesn't mean it added that full value, or any. Most of the time you are taking OEM Items off that have value and putting the a/m part on and there is really not much difference between the prices of the two items. For example, wheels or suspension. If you take off the OEM 18 or 19" wheels to put on some VOLKS the adjuster will get a quote for the OEM wheels (which is pricey from a dealer) Then they will see what was spent on the volk wheel and find the difference. If the value is in excess of the OEM product then they might be able to apply any additional amount to the repair, or total loss value of the vehicle, or pay up to the OEM price. You end up not being out of pocket too much unless you went really crazy with some items, like the AMUSE R1 exhuast (YUM) :0)

In the end, a/m parts and modding, although fun, actually devalue your vehicle to the "market" They are individual tastes and preference items and we on the board have an appreciation for it, but trying to sell your car with a/m items is harder because your market is now narrowed to people like us on the forum instead of the regular market. which is why when most people sell their cars, they part it out to make as much back as they can. It just is worth more off the car, than on it come time to sell.

The best thing to do is to KEEP ALL OEM parts and if you are in a total loss, take off the a/m parts and put your OEM stuff back on. You will get the same value as they were going to give you with the a/m parts (depending on coverages) Or take the excess parts such as Turbo or supercharger off the vehicle and sell individually to make some of the money back. THIS IS THE WAY TO GO!

Fraud is a very difficult thing to prove on a side note, it is very risky for an insurance company to deny a claim based on fraud because you are trying to prove someone's intention and that opens us up to bad faith lawsuits. Jury's tend to rule in favor of the insured and not the insurance co. It is not fraud when you don't tell the insurance company you have added a/m parts, however it would be if, for example, you didn't tell them and then sued them to cover the items because the policy excludes it. You do run the risk of being dropped or cancelled next period if they find out all this stuff on your car. A lot of people ASSUME it is covered and, usually it isn't Just because you THINK it is covered doesn't get you a free pass...

Also, insurance provides a coverage. They cover stupidity, literally. We say it all the time. Insurance isn't the police or the law. If you are driving drunk and you get in a wreck, it's covered. Unless you have an exclusion on your policy. If you have a supercharger and the insurance didn't know about it and you were in a wreck, they will cover it if you have liability even though you didn't tell them. (again unless you have a specific exclusion about this which I have never seen) The only thing that will happen is that they won't cover all the a/m parts on the car because they did not know about it.

you can take a few routes. If you want it covered, the best thing to do is talk to your agent. Make copies of receipts and give it to them, keep some for you so if you are in an accident you can give them receipts of exactly what was put on, for how much and the date. Most policies are actual cash value, so depreciation is taken.

If you don't want your rates to move up, or don't care about having the items covered, then there is no need to say anything to your insurance company, just know if you are in a wreck you probably won't get those items reimbursed or replaced, just OEM.

You can get your vehicle appraised and present to you insurance agent, you will get a stated value but read the fine print. Even though you insure your car for a certain amount like (50K) doesn't mean you will get that. It just LIMITS the pay out. The policy will still typically pay out on a (what is your vehicle worth today, depreciation basis) These aren't collector cars yet. So I would say this is NOT the way to go, unless you have a REPLACEMENT COST Policy which is very rare and $$$. The higher the risk, the higher the possible payout on a loss, the higher your premiums. OR you could just be denied coverage because the risk is too high...

**typically OEM prices from dealerships are $$$ anyways, and your policy covered replacement for the OEM part, so you would only be out the difference to the a/m item. So in most cases it won't be much at all. ***

In the end, even with all this knowledge, I mod the hell out of my cars and don't say anything to my insurance company because I choose to take on the risk of a loss myself. IMO the premiums to pay out on a/m items isn't worth what you will get back if you are in a loss. Because again, the policy already covered the cost of the OEM item, therefore I won't be out of pocket much when I apply the difference myself. This would mainly apply to wheels, exhaust, suspension, but not Turbo or Supercharger because you never had an OEM one in place.

Hopefully this helps anyone that reads.. I tried to cover questions I tend to come across on forums, friends or even when I handle claims. Let me know if you have questions.

great info, if i may ask for which insurance do you work for?

at the end of the day it all comes down to "Who has the better lawyer"

I can almost guarantee you that if you bought a policy for $50k on your car and all your a/m parts and the cost of your car fit in to that amount.........With some good lawyering you will get paid.

Letting ins company know about the modifications is simply asking to get raped on the premium......which they love to do.

which is why I say it isn't worth telling them. I don't.. :biggthumpup:

The #1 reason premiums are so high for everyone? Fraud. Billions of dollars are paid out every year.

Good Lawyers are handy. Although when it comes to specific exclusions and limits (which is normally the case with A/M items) or the policy pays out on replacement cost vs. actual cash value it doesn't matter the lawyer. Those lawsuits are usually more about "how the claim was handled"

However the majority of policies are left open for interpretation on many things.

+10 from a fellow adjuster!

Thanks for the info :biggthumpup:

Lets expand on this a little. And yes... its a long post.:dunno:

First... the adjuster will not give a second look at an aftermarket part regardless. When possible you want the other insurance company to pay when not your fault. Its just how things should work. The only way you will get a dime for that is to either fight for a percentage with receipts or with an endorsement and get the amount you covered them for if its for your company. If you get hit and another driver is a fault then your sol period. You have to peruse your company for the repairs or reimbursement.
This is also something taken up by the claims office that the adjuster has nothing to do with.

Second... your agent is a lot more value then lead here. A good agent will go to bat for you if you get in an accident and are being treated unfairly in a claim. The agent is also going to make you prove what you want extra coverage on. I know my agent requires me to have pics and receipts of all the extras I am asking for extra coverage on. Its policy and if not done right the underwriter will cancel the policy until its corrected. You need to be vocal with your agent and ask questions. You also need to have some common sense and do your due diligence.
Check your agent and ask questions. I know my agent has been in the game a long time and keeps a high renewal status. This is important since it indicates how well he takes care of his clients. Insurance should be like buying a car. Ask questions and do your research. It can be a deal breaker if or when a claim pops up.

Third... most all body shops are not going to let someone come out and just start replacing parts on a vehicle. This has never been standard practice and becomes a liability for the body shop and considered a no...no. It just doesn't work like that. If you know the owner at the shop then I can see there being no problems. Been there and done that.
Once your vehicle is addressed its on its way to the insurance company choice. Many body shops charge a storage fee so time is a factor on getting the car taken care of ASAP. Funny how getting a check isn't though.:icon43:


Its important that the consumer knows that they have more rights and power then you would think.
If you just had work done or bought new tires then you can get money back instead of taking a hit. It will be a percentage but something is better then nothing. You need to fight this though. You can also refuse their low ball offer and negotiate a better one that is fair. Insurance adjusters are there to get the insurance company out with as little cost as possible. Most are not even qualified to do their job and the claims office is even worst. They have no knowledge past what a computer tells them. They miss lots of things and body shops need supplements on 90% of the work they estimate. That's after using used and knock off parts. Even though you have an option here. Most even sunk so low as to use a private company to get vehicle values that are bias and geared toward the insurance companies. They value cars thousands less then the real world value and screw customers by the minute.
You pay like a slot machine to have coverage in time of need and they take care of you like a second class citizen. The Insurance Standard.:icon17:

I am not just pulling this stuff out of the air. I have been an agent at American Family as well as been in the body shop business all my life. I have also had the displeasure of having many cars totaled by careless drivers and have been on all sides of the system.
I am not trying to sound negative toward adjusters here but they have forced good body shops to drop standards and use sub par parts for repairs for many year now. Not only do the body shops suffer but the consumer does too. It may not even be the adjusters. It may be the insurance companies and the sub par training they provide the adjuster. Hard to tell. Either way its a sad case from all sides. With people willing to drop standards and allow insurance companies to control business other then their own we all loose.
Insurance companies just have no care for you or your possessions. They just want your money every month. The agent has more care since he is the one getting paid by keeping you around which is why a good one will stick up for you in time of need.


Now a couple scenarios.
Car gets hit head on in their own lane by other driver. Other driver is at fault and admits it. Car that got hit has wheels and suspension. Adjuster comes out and looks over damage. Writes it up without opening the hood. Misses frame damage and engine damage. Owner of car points out other damage and adjuster say oh...lets open the hood. Looks at owner and says well its totaled. This damage would have been found by the body shop but would have also stalled the process of resolution. Now...an amount is figured from a private source instead of market standard and is 3 grand too low and no compensation for wheels forgetting the suspension. Insurance company then says prove it. Now owner is out in time getting info to show how off they are due to adjusters poor work.
Owner says screw this and goes to his own insurance company and ends up with 4 grand more and proper value since his insurance company doesn't use this private company for values. The wheel endorsement was just a bonus and no deductible since other side admitted fault.

Car gets hit by driver on cell phone running a red light. Insurance company looks the car over and determines damage. Car is clearly totaled and a high valued car. Adjuster misses tranny damage and frame damage again. Body shop writes car up and now the car is a total but insurance company wants to argue. Being a dealer car with clean title the car was entitled to diminished value as well. All cars are but you will never know since its a big secret.:icon17: After a month the insurance company totals the car and takes it away after a lot of fighting and wanting to cheap fix the car. The diminished value is what pushed it over the top of being totaled.
There would not have been a way for the dealer to recoup the cost of this vehicle and damage after repair.

Point is. If you do not stand your ground and make sure you are whole and look over what the insurance company is doing your sure to get screwed. Its important to have a good policy but you cant control what another driver is going to do and how another drivers insurance company is going to handle things. It doesn't matter how many parts you have on the vehicle. There is a dark cloud that insurance companies put people in when a time of need comes around and you need to have the knowledge to handle it and be treated fairly. They do not hold all the cards but many give up when dealing with them.

And for a final note....
If you finance a vehicle get gap insurance! This is probably the best advice out of this whole thread and very cheap insurance.


No offense to the OP. Great topic that many neglect. He is trying to help but those on one side do not have a good perspective on the whole picture. I have left a lot out since this is already a long read.:D

Three most important point's in that last post:

These three statements are very very true.

When my 94 Trans-Am was totaled our agent gave me some similar advice. By applying it, I ended up getting over double the insurance company's first (slap in the face) lowball offer.

I don't know if this is per-state (insurance gurus chime in please) but the insurance company is required by law (in FL anyway) to provide you with every single thing they used to determine the value of your car if you ask for it... so by all means ask for it!!! It's usually not hard to call them out on 'mistakes' (or maybe tactics) that made them value the car low. For example, for my car, they checked NADA for a base model V6 Firebird, not a Trans-Am with Leather and Alloys.

GAP insurance is great, but you only need it if you didn't put a large deposit down. GAP covers any negative residual left between the value of the car and the loan. Gap is a great product, but why pay for it if your loan is always going to be less than the value of your car?? This is for rollovers, high interest rates, and no down payments. If you buy a new car, unless you put 80% down... GET GAP INSURANCE!!

There are good adjusters and bad ones, just like every other profession. I know I have received good training, to top it off I am familiar with car values since I buy and sell so many and modify them! I do the right thing for the right reason, and I rarely have unhappy customers. I don't try to lowball anyone. We have to support our value and give that research to the customer. If they do not agree and can provide support for a higher value I do not hesitate to take that into consideration. Again, there are good and bad in all work places. I have only worked for one insurance co. I work for one of the big ones and again, we don't just low ball people from my experience. And if the offer was off, and there was vehicles that supported a higher value, we make those adjustments.

Always check to make sure they have your options correct, packages, models, mileage etc. These all play a huge roll!! Each state is different on what they will accept for supported values.

IE. KBB, NADA, dealer quotes, comp. vehicles (autotrader, cars.com) I can say that I settle 98% of my claims first time around. I provide exact vehicles and research that shows why I am offering what I am. The biggest arguments that happen are due to aftermarket parts and the coverages the policy provides. (none usually) and people were not aware.

Agents are the same, some good, some bad. Sometimes agents sell a policy they have no idea on, a claim comes along and everything they told you is wrong. Again, remember what the agent told you, because even if they are wrong, they sold you a policy with certain expectations and we can extend coverage on agent errors. Having a good agent always helps, as well as adjuster.

I have been on both sides (agent/adjuster) I think to have knowledge about both is the key. To understand how, sometimes the policy has limits even if you don't agree with them. Or to make sure the agent is adding endorsements for the proper coverages on extra items not covered in the main policy. I don't get special pay, or bonuses just to low ball customers. There are no goals on this. Ultimately, this money isn't even mine, so why do I care what I pay?? I pay what is deserved, per the policy that was purchased and support is provided every step of the way.

You don't have to accept the first offer given, and you can stand your ground, but be reasonable. Don't just say you think it is worth $$, go out and prove it! The best thing for anyone to do in a total loss, is to pull up vehicles on autotrader.com (200 miles or less to start) and find ones that are as similar as possible. Mileage, options, packages, years and send those in to your adjuster.

Cheers!

Lots of interesting thoughts and opinions. But like anything else,your results may vary. I dont know every,agent adjuster,ins co. I know how things are done in my area so its interesting to hear some of these storeis.Its in your best interest to not to assume and research you sitaution. Every person involved in the porcess has a financial stake in what you are told.

This is part of what we did to show the insurance company that the car was worth way more than their first offer. (As well as KBB, NADA, etc... for the correct car/trim level)

I think it does have a lot to do with the adjuster though. On my 2nd total loss, the first offer was exactly what it should have been.

Thanks Cat for the post, it was very informative. Could you look at my situation for me if you have time?

I was recently in an accident where somebody totaled my car. I was able to get the big ticket items that weren't damaged off of my car, but I was out of luck for my aftermarket suspension components and sideskirts. As well as all the paintwork for my body parts. All of this totaled to be at least $2500 worth of parts/labor.

Long story short, the guy who hit me had State Farm and they offered me what I considered to be a fair price. I asked them about my aftermarket stuff and they told me to take it off and sell it on Ebay as my best bet. I'm in professional school and I don't have time to be doing that. They would not budge on giving me more $$ for my aftermarket parts and because some parts I had bought private party and didn't have a receipt, I just went ahead and accepted the settlement.

Now, they paid me more than what I could've got for it had I tried to sell it myself. And I was able to find a newer car with lower mileage and still have a good chunk of settlement money left over, however I will eat about $1500 to get my car back to where it was before the accident.

Is there any way I could have better handled the situation?

Thanks for any input you may have.

If you check NADA for my '88 MUstang, it comes back as a $1300 car or something like that which is rediculous considering the real-world market value of it. Hell, the wheels and tires i just bought for it last week are worth more than standard book value.


I insure it a different way though that covers me. In fact, i gotta go get it reappraised in the spring.

every car is different. When you start getting into the older vehicles, classics. NADA and KBB are not the way to go. Getting appraisals and real world comps are. For the normal vehicles KBB and NADA are usually right in line with real world values.

Another thing to keep in mind, when you have high mileage vehicles... the book values can be skewed. Usually after 150K they stop making adjustments. I still think the best way to value a car is to see what others are selling for at the time of the loss...

Good info here. Thanks Cat