Insurance companies cracking down on modified cars

[meep]

I asked my carrier a few years back when I considered lifting a jeep I owned. He asked how high and I said 2”. He said 2” was no issue - said that when it approaches 4 that they got nervous about it. Don’t take that as law or universal, that is what one guy told me at what time one decade ago.

And agreed, it’s not about the dollar value of the mods - most places won’t give much for mods lost in a wreck; it’s about their ability to defend their financial position (and you) in the event of a lawsuit. If the mods to the car can be presented by the other party as contributing to the accident or damages, they won’t want to be a part of that.

 

[Slow Car Sport Mode]

It all depends on the modification. I’m sure insurance companies don’t have the time to check everything out so this is the decision they have made.

If Jimmy lowers his Civic way down low and one night drives over a speed bump at high speed that launches the car and propels his girlfriend into the roof thus biting off her tongue, who should be responsible?

The speed bump, although there sure is a lot going on in your example.

Was the driver cited?

 

[PimTac]

The speed bump, although there sure is a lot going on in your example.

Was the driver cited?

It was a fictional story but around here nobody gets cited or arrested for much of anything.

 

[Owen Lucas]

I've seen several claims denied instantly due to the insured driving a lifted truck with larger tires and a higher bumper height over stock, with lawyers being able to prove the modifications played a significant part in the impacts being more severe.

Instant denial even if they had 1st party coverage?

Lets say it's a lifted truck with a front end collision. Bumper and fog lights are OE, damaged. Aftermarket 44" Super Swampers are torn, non OE wheel scraped, and aftermarket suspension is bent (control arms and knuckle). I can see insurance covering the OEM equivalent including labor. I think denying collision coverage completely would be illegal, enough for a state complaint, especially for the OEM damaged parts.

Arguing the accident wouldn't have happened or would be less severe shouldn't be in the realm of the insurance adjuster or your average claims examiner. They are supposed to adjust the estimate quickly and make a referral if something is suspicious. I can't see denying a claim completely because of mods, even extreme ones, some payout should happen even if minimal to cover damages.

By the time the claims department and attorneys get wind of the specifics, it could be weeks or months before they make a determination and deny coverage at which point the customer was paid out and repaired their vehicle. Maybe these facts could be used to deny liability coverage or degrade their defense, but I find it hard to believe insurance would straight up deny coverage on a paid policy.

 

[jeepman3071]

Instant denial even if they had 1st party coverage?

Lets say it's a lifted truck with a front end collision. Bumper and fog lights are OE, damaged. Aftermarket 44" Super Swampers are torn, non OE wheel scraped, and aftermarket suspension is bent (control arms and knuckle). I can see insurance covering the OEM equivalent including labor. I think denying collision coverage completely would be illegal, enough for a state complaint, especially for the OEM damaged parts.

Arguing the accident wouldn't have happened or would be less severe shouldn't be in the realm of the insurance adjuster or your average claims examiner. They are supposed to adjust the estimate quickly and make a referral if something is suspicious. I can't see denying a claim completely because of mods, even extreme ones, some payout should happen even if minimal to cover damages.

By the time the claims department and attorneys get wind of the specifics, it could be weeks or months before they make a determination and deny coverage at which point the customer was paid out and repaired their vehicle. Maybe these facts could be used to deny liability coverage or degrade their defense, but I find it hard to believe insurance would straight up deny coverage on a paid policy.

These vehicles were usually highly modified with much larger tires, higher suspension and massive steel winch bumpers. Squatted trucks were also just starting to be a thing around that time, and I can tell you they basically glide right over another vehicle's hood in a head-on collision. Probably the reason many states are outlawing them. States with bumper height laws were an instant denial for anything over that, as the insurance companies use those laws to their advantage.

Usually the process was getting recorded statements and police report, then pictures/video of the accident if available. Adjusters/appraisers would be sent out to examine the vehicles. If it was clear the at-fault vehicle had significant modifications that could have possibly contributed to the accident, the coverage was denied, especially if the other party claimed "I was hit by a lifted truck and that is why I had more damage, injury, etc". Most of the policies at the company I worked for included fine print about modifications. These were usually high dollar claims with injury, and extensive property damage. With these types of higher payouts the insurance companies check every single thing before paying out a dime. A single vehicle accident where a lifted truck hits a pole or a physical damage only claim (no bodily injury) will likely not be an issue. These larger claims take weeks/months by the way, I waited 6 months for a police report once.

One thing I learned about insurance companies is that they are not out there to help people. They are out to make profit. They provide coverage for their insureds as long as those insureds meet *their* circumstances. Any way they can lean the circumstances in their favor equals more profit, and they have absolutely no problem denying coverage on a paid policy if you don't play by their rules, even the intentionally hard to find ones.

 

[DGXR]

Too many unknowns. If Bubba down at the pick & pull yard is the person who installed your aftermarket suspension, I would not insure you either. I may be way off here, but I would imagine the insurance company has to make a special trip to do an inspection and confirm the modification was done correctly, with approved parts, confirm the credentials of the mechanic, etc etc. Why would they bother, to insure just one car? Way too much trouble for them to deal with, hence the fast and hard NO. Also consider there are millions of *ahem* factory stock vehicles out there that are super easy to insure. Being "special" has its price LOL.

 

[jeepman3071]

Too many unknowns. If Bubba down at the pick & pull yard is the person who installed your aftermarket suspension, I would not insure you either. I may be way off here, but I would imagine the insurance company has to make a special trip to do an inspection and confirm the modification was done correctly, with approved parts, confirm the credentials of the mechanic, etc etc. Why would they bother, to insure just one car? Way too much trouble for them to deal with, hence the fast and hard NO. Also consider there are millions of *ahem* factory stock vehicles out there that are super easy to insure. Being "special" has its price LOL.

Well that's the thing, losing a few customers is a drop in the bucket to them, and you can bet they won't spend time and resources to send someone out to make sure modifications were done correctly on a car they could potentially insure. They aren't in that business. Their job is to best mitigate risk to their profit from paid premiums.

 

[The Critic]

Well that's the thing, losing a few customers is a drop in the bucket to them, and you can bet they won't spend time and resources to send someone out to make sure modifications were done correctly on a car they could potentially insure. They aren't in that business. Their job is to best mitigate risk to their profit from paid premiums.

Or nowadays, just find a way to breakeven on Auto so that it can be offset by other LOB's.