Adding "custom parts coverage" to insurance coverage?

[mcgaskins]

Most of us here have added on a few bits of expensive parts to our LCs that would likely not be covered by insurance in an accident. I could easily see how $10k in mods could be lost in a claim where the vehicle is totalled with front and rear bumpers, sliders, lifts, etc. I was wondering how many of you have added coverage for custom parts above what your current policy offers out of the box. My company, Progressive, allows $1k in custom parts automatically and you can buy up to an additional $4k in coverage for things like bumpers, winch, paint, etc. It looks like going for the full $4k in extra coverage costs about $50 per 6 month period, so I'm trying to decide if I should go for it. IMO the likely payout from my insurance company would be lower than the actual selling value if it was to be totalled, so I'm thinking adding the coverage would be a good stopgap to help bridge the two. Does anyone else add that kind of coverage?

 

[yotasavg]

Not yet b/c I'm still pretty stock, but I did talk to my agent about it and she said as I build we could up the coverage to match.

 

[OregonLC]

State insurance laws govern what insurance companies can sell and also what they have to provide. There isn't much available in the state of Oregon. I've pushed my agent to look for ways of buying a $10k equipment rider and there just isn't an option. State Farm will cover the accessories with documentation (receipts) but this only applies if the vehicle isn't totaled (hull value, not including accessories). And what's more troubling is that we have a very high salvage value.

So if you have a book value of say $15k and a salvage value of $8k, it only takes $7k in damage to total the truck. Think about it: at $8k in damage, it's cheaper to write you a $15k check with $8k of it coming from the salvage yard and $7k from them then to have $8k (or more) come from them. If the same vehicle had $10k in accessories, you might get some of that back arguing that the insurance co would need to find a comparable 'built' vehicle but there's no way you're going to see a check to buy all of those parts again for your replacement truck. You also lose the ability to recover diminished value claims in a total.

Assuming you survive the accident and are walking around one strategy would be to have the vehicle towed to your residence so that you keep control of it and can strip whatever salvageable mods you can harvest. Keep the OE parts and throw them inside the truck when they come to pick it up. Another strategy would be to buy the truck back from the insurance co and do the same. Regardless, you're probably going to lose several Benjamins in the process.

 

[mcgaskins]

State insurance laws govern what insurance companies can sell and also what they have to provide. There isn't much available in the state of Oregon. I've pushed my agent to look for ways of buying a $10k equipment rider and there just isn't an option. State Farm will cover the accessories with documentation (receipts) but this only applies if the vehicle isn't totaled (hull value, not including accessories). And what's more troubling is that we have a very high salvage value.

So if you have a book value of say $15k and a salvage value of $8k, it only takes $7k in damage to total the truck. Think about it: at $8k in damage, it's cheaper to write you a $15k check with $8k of it coming from the salvage yard and $7k from them then to have $8k (or more) come from them. If the same vehicle had $10k in accessories, you might get some of that back arguing that the insurance co would need to find a comparable 'built' vehicle but there's no way you're going to see a check to buy all of those parts again for your replacement truck. You also lose the ability to recover diminished value claims in a total.

Assuming you survive the accident and are walking around one strategy would be to have the vehicle towed to your residence so that you keep control of it and can strip whatever salvageable mods you can harvest. Keep the OE parts and throw them inside the truck when they come to pick it up. Another strategy would be to buy the truck back from the insurance co and do the same. Regardless, you're probably going to lose several Benjamins in the process.

I agree and that's my fear. I have never seen a 100 in a bone yard so I'm sure they fetch high dollar when they come in. Most of my current mods are fairly bolt on but I'm debating on regearing and putting in a front ARB locker, and there is no way I would recover that kind of $$ for parts and labor. That's the big downside of modding trucks is that there's some inherent risk of losing out money on the mods if the truck gets totalled.

 

[RobRed]

...
Assuming you survive the accident and are walking around one strategy would be to have the vehicle towed to your residence so that you keep control of it ...

^^^^ This.

 

[OregonLC]

But... a front locker also isn't likely to be damaged in a collision. So worst case you buy the truck back, buy a replacement, and swap the front diff assembly.

I guess the other this that comes into play is whether or not there is a loan on the vehicle. If that's the case then I'm not sure how you would reconcile a buy-back with the lien holder. I pay cash so it's not something I consider.

 

[DJWUZJ]

Its funny you mention this... I was actually thinking about it this weekend, and trying to think back to other experiences, and ultimately, I think that there is some "wiggle room" if you have a sympathetic adjustor, but otherwise, SOL on most of the stuff.

I just put a quote in to see what the cost would be to cover just the high dollar stuff with Geico.

The best story of all for us on this may be Onur's... The bonds we have with our toys are like some people's bonds for pets!

 

[12guns]

If the extra coverage is available and you have over 1k in aftermarket parts, but the extra coverage. You're right in that Progressive allows up to 1k additional coverage for aftermarket parts. Most people don't realize their policy premiums are directly related to the approximate ACV of their vehicle (among other variables). That said, when a person adds $10k in aftermarket parts their premiums should go up to reflect the added value. I have worked countless claims where people didn't realize the need for cp&e coverage.
Keep in mind also if you retain salvage and are keeping those aftermarket parts, they may only pay for the damaged aftermarket parts. Makes sense if you think about it.
More food for thought: CP&E or custom parts and equipment coverage is mostly used for damaged parts. So if your rig is totaled, and the insurance keeps the vehicle, you will be paid for those items based on market value- not based on what they cost when purchased years ago. It's kind of a catch 22... You need the coverage, but when determining market value of your vehicle, not everybody wants all the bumpers, winches, and gear. That's all the more reason to have the specific coverage that will more directly address each item and it's cost/value.
Clear as mud? Hope that helps somebody out there.

 

[mcgaskins]

If the extra coverage is available and you have over 1k in aftermarket parts, but the extra coverage. You're right in that Progressive allows up to 1k additional coverage for aftermarket parts. Most people don't realize their policy premiums are directly related to the approximate ACV of their vehicle (among other variables). That said, when a person adds $10k in aftermarket parts their premiums should go up to reflect the added value. I have worked countless claims where people didn't realize the need for cp&e coverage.
Keep in mind also if you retain salvage and are keeping those aftermarket parts, they may only pay for the damaged aftermarket parts. Makes sense if you think about it.
More food for thought: CP&E or custom parts and equipment coverage is mostly used for damaged parts. So if your rig is totaled, and the insurance keeps the vehicle, you will be paid for those items based on market value- not based on what they cost when purchased years ago. It's kind of a catch 22... You need the coverage, but when determining market value of your vehicle, not everybody wants all the bumpers, winches, and gear. That's all the more reason to have the specific coverage that will more directly address each item and it's cost/value.
Clear as mud? Hope that helps somebody out there.

Funny thing regarding actual cash value is something I ran into a couple days ago. I'm considering getting an Audi A5 which has an actual cash value probably around 15-20k higher than my LC. When I ran a quote on my insurance to replace the LC however, the new premium quote was only $7 higher every 6 months!! The added cost to insure $4k in custom parts was $53 every 6 months, so it looks like they're adding some kind of risk premium to that difference in ACV. Perhaps custom parts makes the vehicle more "risky" for things like theft or accidents which in some ways makes sense. I try to put every purchase decision through the financial lens to be sure it makes sense to invest (or lose) the money, and the last big ticket item I'm considering adding to my 100 is the front locker which IMO would be too much of a hassle to get out of it in a total loss situation.

 

[brevitything]

When my old Audi was totaled, the insurance company for the person that caused the accident did pay about $2000 more than I expected. So in case of an accident the adjuster you work with may help out. The Audi had a new steering rack, alloys, tires, shocks... I asked the adjuster about keeping the car, not sure if that had an effect on things as well. He said that he would pay $600 less if I kept the car, which would have let me switch off the new parts. Unfortunately I was just too bummed to consider building another Audi and keeping it for parts, so I let it go. The chassis was totally banana-shaped. I just wanted to get another vehicle and move on, it was a stressful week and I didn't want a salvage car sitting around.

I used the claim check to buy my old Jeep, and then the 4x4 madness began... In Ohio I was able to get $1k or $1.5k of extra equipment coverage, I think it was a lot less than $100/yr. But that may be a state by state thing as was mentioned, and my Jeep is cheaper to insure than the Hundy.

As I build the Hundy and get my coverage increased, I will try to remember to post back about the pricing.

 

[duncan]

Youll pay dearly for that coverage. Keep your receipts and keep it

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