If you’re like a lot of other off-road enthusiasts, you’ve spent money modifying your off-road truck or plan on doing so to increase traction, add more ground clearance, and improve overall off-road performance to do more on the trails.
Yet all those mods can add up after a while and leave you with the question of what happens if you’re involved in an accident or your vehicle is damaged somehow?
Typically, you’d turn to your insurance company to help you out, right?
Well, not so fast there, buddy!
Did you know your insurance company may not cover a lot of those costly upgrades, leaving you with the bill?
Before you spend another dime on mods or insurance, read this and learn how to deal with the uncertainty about whether or not your upgrades will be covered if your ride is damaged and how to ensure they are covered in the future.
Standard Auto Insurance Covers Standard Losses
Simply stated, the typical auto insurance policy provides coverage for a typical vehicle in the condition it was when it rolled off the sales lot.
Usually, this means factory stock plus whatever extras may have come with it, also from the factory or maybe from the dealer.
This is the vehicle your insurance agency sees when searching your VIN number and will reimburse according to what is factory or dealer installed for that vehicle, especially if you haven’t notified your insurance agent that you added certain parts or modifications.
When an accident happens and the adjuster sees added wheels, lift kits, replacement bumpers and any other performance parts, those may not be included with your reimbursement no matter what they cost.
Know What Is and Isn’t Covered
Protecting your investment in modifications and aftermarket parts put on your off-road vehicle starts with knowledge from the start of what your policy does and does not cover.
Most policies have a clause that covers modifications, so ask your agent to show you in the policy specific language about included and excluded coverage that applies to your vehicle and explain how this applies to your truck or Jeep.
If certain acceptable modifications are covered, have your agent show you exactly where this is stated in the policy and if there are any limitations.
Confirm what your policy considers a modification, as that can differ by company and state to include everything from an upgraded sound system and interior to body, engine, suspension, wheel, and tire enhancements.
Discuss Your Specific Coverage Needs
Once you know what your insurance company considers to be a modification and which mods your insurance policy doesn’t cover, it’s time to start discussing your actual insurance needs for your off-road truck or Jeep.
Do this before you actually make the modification, since getting coverage for an improvement that’s already on the vehicle can be more challenging.
Discuss what you want to do with your vehicle, the cost of these modifications, and how to get them insured to protect your investment.
Although these mods will come with a higher insurance premium or a need to add extra riders, at least your off-road truck or Jeep and its expensive modifications will be covered!
Decide Between Types of Valuation
In arranging this coverage, discuss with your insurance agent what type of valuation the company uses if a modification is damaged by a covered loss, as there is replacement cost, ACV or actual cash value, and agreed valuation.
- Actual Cash Value means the part will be replaced at the current replacement cost minus any depreciation that would have occurred to that part while it was being used.
- Replacement Cost is what that part currently costs at the time it is replaced on your vehicle.
- Agreed Value means that you and your insurance company agree on how much will be paid if that part is damaged and must be replaced and that amount will not change no matter how much the cost of the replacement part has increased or decreased.
Obviously, ACV is going to pay the least of the above three options, Agree Value would pay more but doesn’t allow for any increase in price over the length of the policy, and Replacement Cost will pay for the current cost of the damaged part.
Each of these options comes with a price tag, with ACV costing the least in premium dollars and Replacement Cost having the highest price tag; Agree Valuation is usually somewhere between those two valuations.
Protect Your Investment
After all is said and done, you definitely want to know that if a covered loss happens to your off-road truck or Jeep, all that money spent on modifying it will be protected.
The only way you can do that is by communicating with your insurance company via your insurance agent so your company will know exactly what modifications have been done and exactly what covering those modifications will involve.
Never ever assume it’s covered just because it’s on your vehicle.
Plan ahead, get with your insurance agent when you want to make changes or modifications so they are properly reported to your insurance company, and your investment should be safe!