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Junior Member
 
Group: Forum Members
Last Login: Today @ 9:03:22 AM
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| Anyone have any experience/recommendations/advice about insuring a modified BMW? In particular, how do insurance companies here in TX respond to things like superchargers? I'm not so much interested in whether the aftermarket parts would be covered as I am in whether they might decide to drop my coverage for some reason. I can only begin to imagine the problems that could arise... from having them drop my coverage from merely reporting the presence of a SC to not reporting it and then having them deny a claim for having failed to report it. Does anyone have any experience with this? Thanks!
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Supreme Being
Group: Board Of Directors
Last Login: 9/15/2008 12:43:49 AM
Posts: 535,
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in your post you stated that you were concerned about being dropped, and not concerned about the aftermarket parts
being covered, and then you did a 180 and said you were concerned about coverage of aftermarket parts if you filed a claim.
For MANY years, the auto policy here in Texas was the same for every company so I could tell you things with 100% confidence. In the last few years, since the " black mold" crisis, some companies have sought and been able to have a unique policy ratified by the Texas Department of insurance, so there are some unique policies out there so I can only tell you to read your policy sure if you want to be 100% sure about coverage. That said, for the most part, most TX auto policies do not exclude coverage for aftermarket parts, whether they be engine mechanical parts, body panels, suspension, intake, custom paint, etc. Aftermarket stereos are covered up to $1500.00 (less applicable deductible) on all personal auto policies, and stereo items that come installed on a vehicle FROM THE MANUFACTURER (as opposed to items installed by an aftermarket shop commisioned by the the dealer to do the install prior to the purchase of the vehicle) are covered.
Back to your specific question... is your supercharger covered... In all likelihood, yes! the standard Texas Personal Auto policy form has no exclusions for aftermarket parts. So.. what do you need to do? First.. make sure you have a personal auto policy. If you have your vehicle(s) on a fleet, or commerical auto policy, as a business vehicle, you DO NOT have the same coverages as the personal auto policy.
1) save receipts - save receipts for aftermarket parts as well as their installation cost. If you bought the item
from Ebay, print out the auction listing from your purchase and add it to your file. This is ESPECIALLY important
for things like aftermarket wheels, which tend to be on the market for 1-3 years, and often are discontinued and
NLA when a loss occurs.
2) take PHOTOS - save them on a disc in case your vehicle is completely stolen or stripped, then you
will have EVIDENCE that the item(s) was on the vehicle. This is *really* important if you did not do #1 above
3) keep items 1 and 2 secure, with backups/copies in a secondary location.
Things NOT to do.
1) DON'T call your agent, " just to make sure". I don't care how nice or how " cool" your agent is. When it comes
to aftermarket parts, especially " go-fast parts", there are lots of insurance company personnel that would rather
insure " Driving Miss Daisy" than "Mr. Fast and Furious." Don't be an idiot and call up and ask if your super triple
nitrous system is covered, and give someone that is very conservative a chance to get rid of you as an unsafe risk.
2) DON'T call your insurance company asking for them to write a letter to you to tell you that your item is covered.
You already HAVE a policy. The policy tells you what is covered and what is not covered. If you don't have a copy,
of your policy, then ask for a copy of the policy and then read it.... Yes.. I know.. it's not written in plain English.
Sorry.. the GOVERNMENT probably wrote it, or maybe your insurance company did. It's convoluted, and hard to read,
but the answer is there in black and white. Your insurer is not going to write you a specific letter about you, when
they already have given you a policy that tells you what is covered and what is not.
PAYMENT OF THE LOSS
Your insurer owes you the actual cash value of the item as determined by the market at the time of the LOSS,
not at the time of PURCHASE. For example.. one spends $3000 on aftermarket wheels, and 2 years later the
wheels are marked down to $2000 for the set, and then clearanced at $1800 for the set for 6 months until all the
supply is gone. If the wheels are stolen after they are discontinued, the owner is owed the last available price
on the wheels (Not what was paid on the invoice!) which is $1800. Things depreciate. Period. Auto insurance
policies state that the insure for Actual Cash Value (ACV) and not based on original cost.
In the event of a total loss, all aftermarket modifications can, and should be claimed (in my opinion) by the owner.
Again.. having all the invoices will assist you. Now then... the question is how much are your mods worth? For example,
does a supercharger increase the value of a car? Yes... but it's generally harder to find cars for sale that have
superchargers on them, and you may have to do a lot of research and/or educate/assist your insurer on the fact that
your car is worth more. Is this impossible? not at all. DON"T expect dollar for dollar. An 8K supercharger install on a
car will NOT fetch 8K more for the car on the open market... it *might* get you 3-4K. In my opinion. a generally
accepted amount for modifications in the performance community is 50% of the original cost. One *can* do better,
but one can also do worse, depending on the item and it's condition.. 50% is a good average.
EDIT...
I forgot to address part of the original question clearly.... can you get cancelle for simply for having a supercharger on your car? No, you cannot. There is no part of the texas insurance code or your personal auto policy that prohibits you from adding a supercharger, or other performance parts to your vehicle. That being said, as mentioned above, if you give your insurance company the PERCEPTION that you are a risk they would rather not have, it is very likely your policy could get non renewed. The majority of the people that work for insurance companies are conservative. Underwriters are the insurance company personnel that decide what risks the insurance company should insure. As I walk through my office, the 60-70% of the people that sit at desks in the underwriting are probably female, with probably more than half of that amount at an age over 40. Does your Mother (or grandmother) think that making your car faster is cool? Probably not. Neither do underwriters.... Mention words like supercharger, nitrous, big aftermarket body kits, and they think RACING. Do they want to insure someone that they feel might be RACING? Absolutely not. They don't care how safe a driver you have been, because now you are talking about RACING, and you can be sure they'll be checking your claim history. Don't upset the nice little ladies in underwriting by calling your agent, to ask if that supercharger is covered or calling to demand that letter authenticating coverage. If an underwriter feels you are a risk they do not want, they CAN non-renew your policy. Nonrenewal means that your policy will not be renewed when it next expires. Cancellation means getting rid of a risk RIGHT NOW, TODAY. Either one puts you out on the street looking for a new insurer.
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Junior Member
Group: Forum Members
Last Login: Today @ 9:03:22 AM
Posts: 19,
Visits: 418
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Thanks! Lots of good info here.
Sorry if I wasn't clear in my original question. My biggest question really was whether or not it's in my best interest to disclose the fact that I may be adding a supercharger to my car... which I think you have addressed. Like I said, I'm not so much concerned about whether the aftermarket parts are covered under the policy as I am in making sure that I don't compromise my existing coverage due to some loophole in the policy.
For clarification, my first concern involved having my policy dropped merely as a result of reporting a SC up front. In this regard, I think your response indicated that I may indeed increase the likelihood of non-renewal of my policy.
My second, not so clearly worded, concern was that my insurance company might somehow be able to void my policy and deny any and all claims as a result of my failure to disclose the presence of a SC on my car. I wouldn't want to file an accident claim at some point in time only to find out then that I effectively had no coverage whatsoever due to my failure to disclose the SC. Sounds like this shouldn't be too much of a concern.
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Supreme Being
Group: Board Of Directors
Last Login: 9/15/2008 12:43:49 AM
Posts: 535,
Visits: 933
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An insurance company can only void your policy if the policy is gained by deception. For example, if you reported that you had no accidents or DWIs in the past, and the insurance company issued the policy, but then in doing a background check of your driving history, it was discovered that you actually had other accidents, etc and misrepresented yourself. In that situation, the insurance company can void the policy because they would not have issued the policy if you had stated the truth.
I don't work in an agent's office, but I am fairly confident that the application for insurance does not require one to list any and all aftermarket modification as part of determination of whether or not to give coverage to someone seeking insurance.
Once the policy has been issued by your company as a binder, the company has a chance to do any background history checks, etc. After 30 days have passed, the policy cannot be voided, and can only be cancelled or non renewed, even if it is found that the person lied on the application. As I understand it, the insurer has 30 days to do their research and approve the policy, or reject/void it. Any errors found after the 30 day point are not able to be acted on, as the insurer has 30 days to do their due diligence in researching the driving history of the driver. Of course after the 30 day point, the insurer could cancel the person, but the cancellation would have a given effective date, and coverage would apply up to the effective date of the cancellation. A cancellation letter typically is sent with a cancellation date 7-10 days after the issuance of the letter, in order to give the individual some time to attempt to gain coverage elsewhere. In the case of a non renewal, typically the person is advised of the non renewal more than 30 days before the policy period ends.
I don't work in underwriting, so I am giving you my understandings of the way that policies are obtained and maintained. . There very well may be inaccuracies. However.. suffice it to say that, an insurer can't take premiums from you for say, 3 years, and when you file a claim and report you have a supercharger, then decide to void your policy. Does that make sense?
Since I have the floor, I will add that Radar Detectors are indeed specifically excluded from coverage on nearly every insurance policy. Other than that, I know of no other aftermarket modification that is specifically excluded in the policy.There are many items that may not be covered as they are not vehicle items... For example, an Ipod, home stereo equipment used in a car, hand held cellular phones, laptop computers, video gaming systems, etc. All of the devices i just mentioned are items that can be used in locations other than a vehicle, and therefore not covered under an auto policy. They are covered under homeowner's insurance.
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