The excitement of buying a new car is always there. Today hardly any one buys a plain vanilla car from the dealership. We end-up putting exotic accessories in our driving toy to make it a second home. We just don ’t want to drive our beloved car but also want to live in wile driving. So throwing in few sophisticated gadget like CD Changer / GPS / high-end speakers / window tanning etc may have become a norm today. Even for most of Indians perhaps, stopping at a Specialty Accessories Shop (SAS) is a first stop prior to Ganapati Temple.

‘no matter what improvements you ’ve made to your car — fancy wheels, neon glow, or a more powerful engine — one component is almost certain to lag in performance: your insurance policy ’.

Few drivers realize that aftermarket parts are generally not insured, so if you have an accident in your modified car, your insurer is not likely to reimburse you for the damaged add-ons. Even worse, in some cases insurers may deny the whole claim or cancel the policy.

Still, if you ’re willing to pay more than you would for a standard policy, there are ways to get coverage for those add-ons from specialty insurers and even from mainstream ones.

It ’s not that insurers are against modified cars, they are just not set up to handle them. Generally, the industry tends to shy away from covering modified cars because it gauges risk based on statistics. The bigger the pool of examples, the better the risk assessment.

Sometimes drivers will modify a car without telling the insurance company. Then after an accident, the company finds that the INR 4,00,000 car it insured is now a INR 6,00,000 car, and the owner expects coverage on losses that weren ’t priced in the policy. Insurance companies have sought to protect themselves from unexpected costs of added equipment by putting “exclusions ” in policies.

There are basically 3 kinds of car insurance.

a. Actual Value, which is the common policy that insures the car for its value at the time of the claim.

b. Agreed Value, which lets the driver insure the car for more than its book value.

c. Stated Value, which lets the driver insure the car for more than book value, less depreciation.

Stated and agreed value policies (which go by other names in India or USA) are available from some insurers and may offer better coverage for modified cars, but can cost more.

You also need to check your existing policy to see what is and what is not covered.

The critical passages to read? “There are conditions, then there are exclusions, then there are exceptions to exclusions,

” Beware of broad exemptions. Many contracts exclude “racing parts ” without noting what they are. A tachometer? Grippy tires? A supercharger? Ask your Broker for a definition in writing. We at Bonsai are happy to do that for you.

Sometimes the contracts are too complex for even a Insurance Broker or a lawyer to sort out. “It ’s probably designed that way, ”. A Practitioner ’s Guide. ” The insurance company can say, ‘We wrote it, we know what it means, and we ’re not going to pay it. ’ And they usually get away with it. ” The policies can be so intricate, sometimes even the agents don ’t understand what they are selling, which may be a problem for the consumer. Whatever an agent promises and that is not part of the policy, the company will not honor what the agent promised. So, deal with qualified Brokers than your friendly agent or your nearest Garage Manager. Get assurances in writing.

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