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Custom Parts

Custom Parts


People have been wanting to “pimp” their modes of transportation since the early days. From fanciful wheel designs on chariots to accessories to slap onto their Ford Model A, customizing your vehicle to make it your own has been an important part of the way we live as a society.

For some it’s a simple bumper sticker or fuzzy dice hanging from the mirror. For others it’s installing custom parts that would make any gearhead jealous. But what about insurance? If something happens to my chromed-out ride, will the insurance company pay to replace it? Or at the very least give me back what I paid for the item(s)? Short answer is no, unless you purchase additional coverage for them.

Most auto insurance policies today settle total loss claims (which includes theft of the vehicle) on an Actual Cash Value basis. The simple formula for ACV is this – Cost New minus Depreciation. When the term “Cost New” is used, it means a new & unadulterated vehicle. How the insurance company determines the ACV of a vehicle is typically through the use of a visual inspection, the submission of receipts from the insured for recent repairs, and the use of a computer program.

Example #1

Billy’s 2000 Ford Mustang Convertible

  • had tires replaced 6 months ago for $500 (provided a receipt)
  • installed a custom stereo and speaker box & a chrome exhaust a month ago for $2000 (provided receipts)
  • in generally good condition inside/outside for the year with comparable vehicles selling for around $4,900
  • Billy has a $250 Comprehensive/Other than Collision deductible

Billy’s insurance company using their ACV methods cuts Billy a check for $6100. But wait, you might ask, shouldn’t he get at least $7150 for the vehicle based on the information? No, because Billy didn’t purchase additional custom parts coverage for the stereo & exhaust (his auto insurance company includes $1000 in coverage at no charge) & the company does not pay for labor on repairs in a total loss situation (only the parts).

His insurance company does provide additional coverage for custom parts as defined by:

  • Non-stock radios & stereos
  • Non-stock tape decks
  • Non-stock compact disc players & DVD players
  • Custom wheels, tires, tachometers, pressure & temperature gauges
  • Custom murals, decals, paint, or other graphics
  • Modified/custom engine and fuel systems, light bars, racing slicks/oversize tires & rims, roll bars & lift kits, winches, utility & tool boxes
  • Paint
  • Interior work (carpeting, seat covers, etc.)

What could Billy have done? Talked to his hometown insurance agent about adding coverage for the custom parts & done his own research and submitted comparable vehicles for consideration. We have seen clients receive additional money in total loss settlements because they did their own research.

It’s okay to make your vehicle your own, but make sure you talk to your hometown insurance agent about adding coverage to the custom parts that make it your own so you aren’t out the investment in case of a loss.


Contact Us!

At Marsilje & Vander Plow Insurance Agency, we can work with you to make sure you’ve got the coverage you need, while at the same time using all possible credits and discounts to make that coverage affordable. Just give us a call at 616-396-1497 or send us a note at marsiljeins@gmail.com. We want to help you meet your goals, and make sure what’s important to you is protected!

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