In the event that your vehicle contains faulty equipment and has to be repaired by the dealership, your auto policy wouldn’t come into play. The cost of repairing the manufacturing defect on your car would rest on the shoulders of the manufacturer. On the other hand, if you caused an accident because of the defection that was being recalled, your auto policy would be important. In this event, your auto insurance would need to have the proper liability limits to cover the damage to property and people.
Your insurance company would pay the claim and then start a process called subrogation. This process means the insurance company would seek payment from the auto manufacturer to cover the amount the insurance company provided for the accident.
Remember: Even though the accident is not your fault, until the subrogation is complete (which can take a while), the accident will be on your record with the insurance company! This can cause your policy premium to increase. Good agents have the ability to communicate with their insurance companies and follow the process of subrogation in the goal of eliminating the accident from your insurance record. If you find yourself in an automobile accident it is a good idea to call on someone like the SIG insurance agency based in Dallas, TX. An agency like SIG, which is full-service, can help you not only with your automobile insurance needs but also other types of personal insurance as well. And what about customized vehicles? Insuring the upgrades you make to your care can be an entirely different ballgame.
Most auto policies afford coverage for your vehicle on an “actual cash value” basis, meaning that once you pay your deductible, your car would be replaced based on what it is worth today (based on age, mileage, vehicle condition, etc.), not what you actually paid for it.
While some policies afford a small amount of coverage for “vehicle customization” (ranging in most cases from $1000.00 – $2000.00), many do not. So if those custom rims were stolen, you may find your insurance company paying to put factory wheels back on your vehicle. The same thing applies to that expensive stereo equipment; if you find your vehicle has been broken into and your custom CD player & stereo has been stolen, your insurance company may pay to replace it with the traditional factory system. Lastly, the cost of that custom paint job may not be reflected in the “actual cash value” check that you receive from your insurance company if the vehicle is totalled.
So can you insure your vehicle for these customizations? The answer is yes. Most auto policies do have the option to add an endorsement for custom equipment. However, you as the policyholder are responsible for making your insurance company aware of these aftermarket upgrades. Most auto policies have an option to add either a flat amount of coverage, or to individually itemize customizations to your insured vehicle. While this does cost extra, it is highly recommended. Talk to your agent about any major upgrades or customizations to your vehicle, and ask if these custom features can be added on your personal auto policy. When it comes to investments in your vehicle, the more information that you can provide to your insurance company, the better!