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Old 11-29-2010, 12:37 AM   #1
The-Traveler
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Has anyone SC/TCed their car and told their insurance?

Just curious if anyone has added forced induction onto their car and has told their insurance company about it? I'm interested in how much your rates have increased and what your overall experience has been.

Please don't respond with opinions discussing the stupidity of telling your insurance company.. I'm well aware of this popular opinion.

I'm simply curious.
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Old 11-29-2010, 12:10 PM   #2
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Ok, First; not fully disclosing the modifications to your car VOIDS YOUR POLICY. Anyone who is driving a car with an engine swap, turbo or supercharger and didn't report it is essentially driving with no insurance. The "popular opinion" only exists because it is a game of chance. IF you get caught, and IF you get into an accident... most feel those the odds are slim. I can assure you, WHEN you get into an accident the company WILL deny your claim. There was a client of my office who had an accident, wrote off his car and had to continue making the lease payments for 2 years on his scrapped car while his case went to the courts.

To answer your question. Most companies will not accept a Turbocharged or Supercharged car if that was not an option from the factory. SO you are stuck in a high risk market. FYI - There is some wiggle room with standard insurance companies for ECU tuning, intakes and exhausts.

My car as an example. Best rate I can dig up $1800/yr with a standard insurance co. the comparable high risk quote is $3005/yr. The high risk market does insurance by value so you would probably need an appraisal, but for rough figuring sake just add up the value of your mods and bump up the value of the car by that. So my car $7000 + a S/C kit lets say $4000: new value is $11000. That increases the high risk rate up to $3300.

so no S/C = $1800
with a S/C = $3300

I hope that helps.
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Old 11-29-2010, 12:54 PM   #3
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johnathan, question. I dont have my poilicy handy so mabye you can clarify this. I'm pretty sure my policy only stated i needed to inform my insurance company if i change the displacement or number of cylinders in my car (turbo or s/c not included.)

Would the wording in most insurance contracts require you to disclose a m50b25 in a car that had a m20b25, (both 6cyl, 2.5L bmw factory motors)
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Old 11-29-2010, 03:00 PM   #4
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Propr'one,

If you can, when you find it. please post or PM me a copy of what is on your policy. Just curious!

This is what is stated on the Ontario auto application: "Modified/customized includes changes, other than repairs or restorations that affect the original manufacturer’s design specifications or increase the value of the automobile. These may include, but are not limited to: engine modifications; paint changes; non-factory installed wheels, tires and electronic accessories and equipment, etc. If you are insured for "Loss or Damage Coverage", there is a $1500 limit on non-factory installed electronic accessories and equipment."

The description of 'modified' is intentionally vague. Essentially they want to know about almost everything. What they don't know about, when there is a claim, chances are they'll discuss with their legal team to see if they can deny the claim based on it. The higher the potential payout of the claim, the higher likely-hood they will scrutinize your details. It makes 'them' sound like dicks, but when you consider it is a million(s) of dollars they are guaranteeing they will cover you for if you get sued, It's really only fair they are in the know.

For those of you who are about to post "Insurance is a scam, they make money hand over fist, why should they care what I do to my car if I pay my premium". Don't get all high and mighty; if your buddy asked to borrow your car to go get groceries, you'd lend it to him, If he went to the race track instead, you'd be pissed too. Would it matter to you if he left the gas full, just like he got it? No, It wasn't used for what you agreed to.

What you are trying to avoid is a, "material change in risk" or "non-disclosure". The difference between the two is merely when the modification occurred: either during or before the policy term, respectively.

What they (the company) are trying to avoid, in addition to power upgrades, is getting stuck paying for big dollar rims, custom paint jobs, or stereos they didn't know were there. All of those can be accommodated, but they charge an additional premium based on value and generally a receipt is enough to prove value for those. Generally, if you aren't interested in having your rims or stereo covered in the event of a claim, then you still need to declare them, but state no additional coverage is necessary. If there was to be a claim, the payment would reflect OEM equipment (or $1500 max for non-oem stereos).

Finally back to your question:

M20 vs M50. Because the VIN of a car contains the engine information, you always need to disclose when that information is not correct. Even though the M50 wasn't available in the same chassis as the M20, the reasonable argument is: The original engine needed to be repaired/replaced, they are both 6cyl, within 10% of each other's WHP, both OEM BMW motors, and the M50 is more readily available at a lower cost. I would expect most of my companies to happily accept it, worst case, rating it based on the engine VIN not the chassis VIN. They may ask to have an appraisal done for 2 reasons: determine difference in value (if any) and to determine if the swap was a hack job or well done.

I ran into a scenario where a client had a base Sunfire but had swapped in the GT engine on the Non-GT chassis. I called the insurance co. and asked how to rate it, they said "meh, it's almost the same thing, just put a note on the application that I (the underwriter) ok'd it". no change in rate, no appraisal requested, no worry about denied claims.

Bottom line is if you are in doubt, call your agent or broker. Let them make the judgment call, then it's not resting on your shoulders.
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Old 11-29-2010, 04:06 PM   #5
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Most of what you say makes sense to me but the passage you quoted doesn't seem to give the insurance company the right to deny a claim - only that you are covered for what you insured. So if you put 100k of mods into your 5k car that you insured with them, you're covered for 5k (and a max of 1500 for anything on top of that).

It just don't see how car mods invariably indicate greater risk. Note I'm not talking about paying for someone's damaged mods but rather paying for the lawsuit of the cyclist they crippled. I can see failing to disclose crashes or tickets leading to a denied liability claim, since you are misrepresenting your risk group but car mods... not so much (I'm no agent obviously... just speaking from what seems right by gut feeling).
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Old 11-29-2010, 04:08 PM   #6
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with insurance rates being what they are today and the fact that we hardly ever engage our insurance companies in fear of our rates going up, I bet hardly anybody informs their insurance company of mods. I see this in my circle of friends....
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Old 11-29-2010, 04:47 PM   #7
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Quote:
Originally Posted by BigD View Post
Most of what you say makes sense to me but the passage you quoted doesn't seem to give the insurance company the right to deny a claim - only that you are covered for what you insured. So if you put 100k of mods into your 5k car that you insured with them, you're covered for 5k (and a max of 1500 for anything on top of that).

It just don't see how car mods invariably indicate greater risk. Note I'm not talking about paying for someone's damaged mods but rather paying for the lawsuit of the cyclist they crippled. I can see failing to disclose crashes or tickets leading to a denied liability claim, since you are misrepresenting your risk group but car mods... not so much (I'm no agent obviously... just
speaking from what seems right by gut feeling).
They paint it all with the same brush - lying on a legal contract. They address it further in the declaration of applicant which I've attached below.

For the most part, non disclosing tickets and accidents only happens during the application process. Generally, after we pull your drivers abstract and insurance record, we know all sins.
"Declaration of Applicant"
– Read this section carefully before you sign.

I understand that to qualify for a driver’s licence, drivers:
• must not suffer from any mental, emotional, nervous or physical disability that significantly interferes with the driver’s ability to safely drive an automobile of the
class they are licensed for;
• must not be add icted to alcohol or a drug to the extent that it significantly interferes with the driver’s ability to safely drive an automobile; and
• must notify the Ministry of Transportation immediately if the driver becomes physically or me ntally disabled to the extent that it might interfere with the driver’s
ability to safely drive an automobile.
To the best of my knowledge,
• all listed drivers are qualified and hold a driver’s licence, and
• the details in Sections 1 to 6 and 9 are correct.
Inspection:
My Insurer may require my auto mobile to be inspected. If I do not co-operate with any reasonable arrangements to inspect my auto mobile, I understand my optional
loss or damage coverages under Section 7 may be cancelled, and any claims under that section may be denied.
Warning - The Insurance Act provides that where:
(a) an Applicant for a contract, (i) gives false particulars of the described automobile to be insured to the prejudice of the Insurer, or (ii) knowingly
misrepresents or fails to disclose in the application any fact required to be stated therein; or (b) the Insured contravenes a term of the contract or commits
a fraud; or (c) the Insured wilfully makes a false statement in respect of a claim under the contract, a claim by the Insured, for other than such statutory
accident benefits as are set out in the Statutory Accident Benefits Schedule, is invalid and the right of the Insured to recover indemnity is forfeited.

Warning – Offences
It is an offence under the Insurance Act to knowingly make a false or misleading statement or representation to an Insurer in connection with the person’s
entitlement to a benefit under contract of insurance, or to wilfully fail to inform the Insurer of a material change in circumstances within 14 days, in
connection with such entitlement. The offence is punish able on conviction by a maximum fine of $100,000 for the first offence and a maximum fine of
$200,000 for any subsequent conviction.
It is an offence under the federal Criminal Code for anyone to knowingly make or use a false document with the intent it be acted on as genuine and the
offence is punishable, on conviction, by a maximum of 10 years imprisonment.
It is an offence under the federal Criminal Code for anyone, by deceit, falsehood or other dishonest act, to defraud or to attempt to defraud an insurance
company. The offence is punishable, on conviction, by a maximum of 10 years imprisonment for fraud involving an amount over $5,000 or otherwise a
maximum of 2 years imprisonment.
Consent
I am applying for automobile insurance based on the information provided above. With respect to this application or any renewal or change in coverage, I authorize
you to collect, use and disclose my driving record, auto insurance history and auto claims history, and those of the listed drivers from whom I declare I have obtained
consent for these purposes, as permitted by law for the limited purposes necessary to assess the risk, investigate and settle claims, and detect and prevent fraud.
The connection between a non-disclosed mod and denying a liability claim is a link the lawyers that work for the insurance company make. If they make a good link; you pay for your own legal defence and subsequent judgment against you. If they can't, they pay.

I've read judgments where the courts side with the insurance company and finds, "If the details were reported truthfully to the insurer, the risk would not have been acceptable, based on their filed rules, and the contract for insurance would have never existed". The insurance company then voids the policy the day it was effective.

The good news is, when that happens, they have to refund you all of your premium.

Simple fact is; if the insurance company think they are covering a 318 and you actually have an M3, they aren't going to play nice.
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Old 11-29-2010, 06:12 PM   #8
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I never heard of a company that would insure a modified car in ONT. Can someone please name the company that does. I'm pretty sure I'm SOL.
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Old 11-29-2010, 08:58 PM   #9
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^^Define modified. I had a completely built mkII VW a little while back and I was with Allstate. I must say they were completely awesome about everything. I was covered for all I put in, luckily I never needed to make a claim to see if they would really payout, but I had everything in writing. My premiums were $1500/year for full coverage in 2004. That was the last year I had that car. Now I'm with a different company, but same broker, and they're covering my e30 with some minor mods.
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Old 11-30-2010, 01:25 PM   #10
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Quote:
Originally Posted by Sickbimmer View Post
I never heard of a company that would insure a modified car in ONT. Can someone please name the company that does. I'm pretty sure I'm SOL.
I have yet to find a car I can't insure. For minor mods (suspension, body, ECU tuning), I have multiple options. For a S/C or T/C car, you may be stuck in the facility association but it is insurable.
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Old 11-30-2010, 02:18 PM   #11
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Hey man,

thanks for clarifying that. I'll try to find mine.

I had insurance with dominion of canada. My car was hit (not at fault) when stopped at a red. They covered the following items:
-CF hood
-M3 front bumper
-Aftermarket headlights

The car also had, which was not damaged therefore not related to the insurance claim:
-Xbox w/ TV screen in sunglasses tray
-H&R race w/ bilsteins
-Subs/audio/etc
-bunch of other stuff

it depends how you get as an adjuster. Now, this is illeagal, so i wouldn't recommend it, however if you were to get friendly with a bodyshop that could remove most of the major aftermarket stuff before the adjuster arrives in the case of an accident, then you'd be golden. but who wants to do anything illeagal
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Old 11-30-2010, 02:43 PM   #12
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Quote:
Originally Posted by hockeyfan27 View Post

M20 vs M50. Because the VIN of a car contains the engine information, you always need to disclose when that information is not correct. Even though the M50 wasn't available in the same chassis as the M20, the reasonable argument is: The original engine needed to be repaired/replaced, they are both 6cyl, within 10% of each other's WHP, both OEM BMW motors, and the M50 is more readily available at a lower cost. I would expect most of my companies to happily accept it, worst case, rating it based on the engine VIN not the chassis VIN. They may ask to have an appraisal done for 2 reasons: determine difference in value (if any) and to determine if the swap was a hack job or well done.
I told my insurance exactly that when i swapped in a m52. I told them that my engine died and that the original engine was hard to find so i swapped in a newer engine which is in the power range of the original (m20). Then the agent said "ok but do you have any real modifications? like a body kit, expensive sound system, LCD screens?" Like you said, its better to let them know what you've done to protect yourself.

I was surprised to see they didnt complain about lowering my car or the engine swap.
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Old 11-30-2010, 04:55 PM   #13
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they can deny your claim...but doesnt mean they will....

plenty of examples in my circle of friends where they didnt mention anything... and when it came time for a claim they were fine even after disclosing they had mods(after the fact).

the only reason i would see them denying the claim is if you have some turbo beast and the high power was reason for crashing or something.....
its obviously a risk you take..and frankly the way I view mods is they are out of your pocket and not techincally insured. the car is itself but if i have something expensive on there and it gets stolen (to me) its out of my pocket/my loss.

probably cheaper to take that hit than your rates going up for the next 3 yrs.
Though I know those who claimed aftermarket parts(with receipts) and got items covered.


forget the fact how impossible it is to get insurance if you actually let them know every single thing you had on the car...which is absolutely ridiculous.
like putting an exhaust, intake and springs on your car make it some unsafe power monster. the insurance companies need to burn their copies of fast and the furious.
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Last edited by SiR; 11-30-2010 at 05:01 PM.
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Old 11-30-2010, 07:22 PM   #14
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I want to insure my car so that if anything happened i would be covered. So is it ok to tell the insurance that i got a s/c and that i have valid saftey and e-test... And do we get to choose the guy that does the appraisal or do they provide you with one of there guys?...

I want to make sure the car is insured, just in case...
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Old 11-30-2010, 07:26 PM   #15
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what if in the worst case you get into an accident and someone gets seriously hurt or killed... but u have a modified car. Will they cover the person who got hurt?
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