Reader question:

I’ve had this car for awhile, and have been thinking about making some additions to it. Maybe some rims, tint the windows, pump up the engine and suspension. How will this affect my auto insurance?

Damien

Great question.

Before you start fixing up your car, stop and consider what it will cost you in the long run. A vehicle that you might not driver very often because it is considered so special will be costing you thousands of dollars a year in high performance car insurance coverage because it falls into a high risk pool. If you are willing to accept these costs, then that’s great. You’re ready to go ahead.

Okay, not yet. You already have an insurance policy, right? Consider the fact that you have to call them up anytime you do something like change your address and telephone number, and if you don’t, they get angry. What would happen if you completely revamped your car without even mentioning it? Failing to provide complete and accurate information is a really easy way to lose your coverage, and then you’ll have a hard time getting it back with a car like that.

So the solution is to have a chat with your car insurance agent about your plans before you actually start doing anything. What you find out during your conversation may be a pleasant surprise and you might be able to keep your coverage. It also may be the case that your insurance company won’t cover high performance cars, so you have to make the choice between the company and your dream car. I think we both know who will win.

If your company does take high performance cars, there can still be big consequences to not reporting the changes you make before you make them. If you happen to get into a collision and your insurance company does not know about your additions and modifications, all of that money you put into that car is lost.

Cheers,

Fashun Guadarrama.