The best insurance for modified cars depends on one question nobody asks first: is this your daily driver? If it is not, specialist agreed value insurers like Hagerty, Grundy, and American Modern are the strongest option, and they will insure your build for a number you agree in advance. If it is your daily driver, most of those specialists will not take you at all. Hagerty’s own guidelines say the vehicle cannot be a daily driver and that every licensed person in your household needs a separate everyday car. That leaves standard insurers, who will cover you, but who pay out on the stock car and cap your custom parts somewhere around $1,000 to $5,000.

Best Insurance for Modified Cars: Key Facts at a Glance

Question	Short answer
The first question that matters	Is it your daily driver? It changes everything.
Specialist agreed value insurers	Hagerty, Grundy, American Modern, J.C. Taylor, Condon Skelly
Will they insure a daily driver?	Usually no. Hagerty lists daily-use cars as ineligible.
What standard insurers pay	Actual cash value of the car, roughly as if it were stock
Custom Parts and Equipment cap	Commonly $1,000 to $5,000, depending on carrier
Typical CPE cost	Around $102 a year on average
Agreed value vs stated value	Not the same. Stated value pays the lower of two numbers.
Do you have to disclose mods?	Yes. Non-disclosure is material misrepresentation.
What happens if you don’t	Denied claim, voided policy, and possibly fraud exposure
Are track days covered?	Almost never on a standard or collector policy

The Modified Daily Driver Problem

Every “top 10 insurance companies for modified cars” list has the same flaw. It puts Hagerty and Progressive on the same list, as though they are competing for your business. They are not. They are not even in the same market, and roughly half of any such list cannot legally write your car.

So start here, because it saves you a week of pointless quotes.

If your modified car is not your daily driver, and it lives in a garage, and everyone in your house has their own everyday vehicle, then the specialist collector market is open to you. Agreed value, real coverage for your build, and often cheaper than standard insurance because you drive it less.

If your modified car is your daily driver, most of that market is closed. Hagerty’s published eligibility guidelines say a policy through them allows club functions, exhibitions, meets, tours, and occasional pleasure driving, but “it just can’t be a daily driver.” They require that all household members with a valid driver’s license have a regular-use vehicle for daily driving, and that they insure it in their own names. Motorcycles and public transportation do not count. Daily-use cars are listed as ineligible outright.

That is not Hagerty being difficult. It is the entire basis of their pricing. Low mileage is why the premium is low.

So the modified daily driver ends up in the gap. Too modified for a standard insurer to cover the build, too used for a collector insurer to take the risk. That is the actual problem this page is about, and almost nobody names it.

Here is the scale of what is at stake. According to the Specialty Equipment Market Association, Americans spent $52.65 billion on automotive specialty parts and accessories in 2024. The standard insurance industry’s usual answer to “what are those parts worth if the car is totalled?” is about $1,000.

Agreed Value vs Stated Value vs Actual Cash Value

If you read one section, read this one. These three terms sound similar, two of them are traps, and the difference is your entire build.

Actual cash value (ACV). The default on almost every standard policy. It pays the depreciated market value of the car. Insurers value it using book data for the vehicle you own, which is a stock car. Your $15,000 of parts do not appear in that book. This is the industry standard, and it is what you have unless you bought something else.

Stated value. This is the dangerous one, because it sounds like protection. Hagerty defines it plainly on its own site: a stated value policy, sometimes called stated amount or maximum limit of liability, gives the insurer the right to pay you either the depreciated cash value or the cost to replace the vehicle, and they will choose the lower of the two. Stated value is a ceiling on what they might pay. It is not a promise about what they will pay.

Agreed value. The real thing. You and the insurer agree the number in advance, and on a covered total loss you receive that full insured amount with no depreciation, including sales taxes. Hagerty brands theirs Guaranteed Value.

So when an agent says “we can do stated value on that,” they have not offered you what you think they offered you. Ask specifically: on a total loss, do I receive the full agreed figure with no depreciation, or do you retain the right to pay less? Get the answer in writing.

Custom Parts and Equipment Coverage: What Standard Insurers Actually Pay

If you are staying with a standard insurer, Custom Parts and Equipment coverage, usually shortened to CPE, is the endorsement that covers your aftermarket parts. It is worth having and it is almost certainly too small.

Here is what the caps actually look like:

Carrier	Custom parts coverage
Progressive	$1,000 included with collision and comprehensive, plus up to $5,000 more available
Elephant	Up to $1,000 included automatically
Esurance	Up to $4,000 as an optional endorsement
Allstate	Available for around $102 a year
American Modern	$2,000 standard spare parts cover, against a $500 industry norm
Most standard insurers	$1,000 to $3,000 without an explicit CPE endorsement

CPE costs around $102 a year on average. That is cheap, and you should buy it. Just be clear about what you are buying: for most builds, it is a partial answer.

Three mechanics that catch people:

It usually requires comprehensive and collision. CPE is bundled onto full coverage. Liability-only means no CPE.

DIY installs may not be covered. Several carriers want professional installation invoices. Fitting it yourself in your garage can put the part outside the endorsement.

It depreciates. Insurers value aftermarket parts on actual cash value principles, applying depreciation for age and condition, the same as anything else. Your two-year-old exhaust is not worth what you paid.

Best Insurance Companies for Modified Cars: Who Each One Fits

There is no single best insurer here, and any page that crowns one has not asked whether you drive the car to work. Match to your situation.

Insurer	Type	Fits you if
Hagerty	Specialist, agreed value	Not a daily driver, garaged, everyone in the house has their own car
Grundy	Specialist, agreed value	Same profile as Hagerty, often at a lower premium
American Modern	Specialist, agreed value	You want $2,000 spare parts cover as standard, or you bundle with GEICO
Safeco	Specialist, flexible mileage	Your classic is close to a daily driver, with a 10,000 mile regular-use option
J.C. Taylor, Condon Skelly	Specialist	Higher-value or unusual custom builds
Progressive	Standard	Daily driver, and $1,000 to $6,000 of parts cover is enough
Elephant	Standard	Daily driver, and you want $1,000 of CPE included automatically
Allstate, Farmers, State Farm, GEICO	Standard	Daily driver, modest mods, you value one-carrier convenience

Two things worth knowing about that table.

Safeco is the interesting one for daily drivers. It offers two mileage options: limited use at 5,000 miles a year, and regular use at 10,000 miles a year with no other restrictions, which works out around 27 miles a day. That is the closest thing in the collector market to a policy for a car you actually drive. The catch is its own restrictions: Safeco covers classics at least 10 years old, limited production modern classics under 10 years, and antiques 25 years and older, and it does not cover kit cars, racing cars, or unrestored vehicles.

GEICO routes classic business to American Modern. GEICO, Progressive, and USAA work with classic specialists to underwrite rather than writing these policies themselves. So a “GEICO classic policy” may well be an American Modern policy with a GEICO bill.

Do I Have to Tell My Insurance If I Modify My Car?

Yes. Always. Every modification, before or immediately after you make it. This is not a grey area and the downside is not a rate increase.

Failing to disclose modifications is treated as material misrepresentation. That gives your insurer grounds to deny the claim and void the policy, regardless of who caused the accident. A voided policy means you personally pay for the damage, the injuries, and the legal costs. Deliberately withholding modification details to avoid a premium increase can also constitute insurance fraud, which carries penalties beyond the policy itself.

Loretta Worters, a vice president at the Insurance Information Institute, puts the milder version of the problem plainly: if your car is worth more after being modified and you have an accident while it is not insured for the right amount, you get paid based on the car’s original value, because the extra was never priced into the policy.

The trap almost nobody sees coming: buying a car that is already modified. You did not fit the wheels. You did not install the exhaust. You may not even think of them as modifications, and nobody told you to declare them. Then an adjuster inspects the car after an accident, spots aftermarket parts that were never on the application, and the claim is denied for failure to disclose. The fact that a previous owner did the work does not help you.

So if you buy a used car with any non-factory parts on it, list them on your application. All of them. That call takes ten minutes and it is the cheapest insurance you will ever buy.

What Not to Tell Your Insurance Company

This question gets searched a lot, and it usually gets answered badly, so let me be direct.

There is nothing you should conceal from your own insurer about your car. Every modification gets declared. Concealment does not save you money; it converts your policy into a piece of paper that fails at the exact moment you need it. That is the whole trade being offered, and it is a terrible one.

What people are usually reaching for is a different and legitimate question: what should you be careful about saying after an accident? That has real answers.

• Do not speculate about fault at the scene. Report what happened. “I’m sorry, it was my fault” is a legal conclusion you are not qualified to make at the roadside with adrenaline running.
• Do not guess. If you do not know your speed, do not estimate it. If you do not know whether you are hurt, say you will be assessed. Guesses become facts in a file.
• Be careful with the other driver’s insurer. You are not required to give a recorded statement to the other side’s carrier, and it is reasonable to decline until you have advice.
• Do not minimise injuries. “I’m fine” at the scene is quoted back to you three weeks later when your neck is not fine.

That is the honest version. Say less about fault, say everything about your build.

Do Modded Cars Cost More to Insure, and by How Much?

Usually yes, and it depends entirely on what you changed.

Insurers are pricing two separate things: the risk that you crash, and the value they might have to pay out. Performance modifications move both. Engine tuning, forced induction, and exhaust work signal a driver interested in speed, which correlates with claims. Suspension changes, up or down, alter handling and can raise rollover or bottoming-out risk.

Aesthetic modifications mostly move only the value side, and often barely move the rate at all.

I am not going to publish a table of percentage increases by modification, because the honest answer is that the numbers floating around are unsourced and vary wildly by carrier, state, driver age, and vehicle. Some carriers route disclosed performance builds to high-risk divisions rather than pricing them normally, which produces a much bigger jump than any published average would suggest. Others barely blink at the same car.

The only reliable figure is the one on your own quote. Get three.

Is $300 a month a lot? For a modified performance car with full coverage and a young driver, no, that is fairly ordinary. For a modest build on a clean record, it is high enough to be worth shopping. Context is everything: $300 a month protecting a $60,000 build is cheaper than $150 a month that pays you book value on a stock car you no longer own.

$500 or $1,000 deductible? Take the higher deductible only if you can write that cheque tomorrow without pain. The premium saving is real but modest, and a deductible you cannot afford is how people end up not filing a claim on a car they spent years building. If your emergency fund is thin, take the $500.

What Car Modifications Won’t Affect Insurance?

Some genuinely do not, and a few will actively help you.

Safety and security upgrades often earn a discount. Alarms, immobilisers, trackers, backup cameras, parking sensors, and adaptive headlights reduce the chance of theft or collision claims, and insurers price that. These are usually not treated as modifications in the risk sense at all. Declare them anyway, because the discount only applies if they know.

Accessibility modifications are protected. Disability-related vehicle modifications are protected under ADA guidelines, and insurers cannot use them as grounds to raise your rate or deny coverage. Declare them regardless, and ask specifically about custom parts coverage for adaptive driving equipment, which is expensive to replace and may not be covered without the endorsement.

Basic cosmetic changes often move the needle very little. A subtle wrap or interior trim is a different conversation from a widebody kit.

And the ones that hurt you most: anything illegal. Insurers will generally not cover modifications that break federal or local law. Emissions tampering, exhausts over the legal noise limit, non-DOT lighting, window tint darker than your state allows, and lifts above legal height limits all fall here. An illegal modification that contributes to an accident complicates both your claim and any lawsuit that follows.

Do Modifications Decrease Car Value?

This one surprises people, so it deserves saying plainly: often, yes.

Not all modifications increase your car’s value, and some reduce its actual cash value, which cuts what your insurer pays if the car is totalled. Heavy personalisation shrinks the pool of buyers. A tasteful OEM-plus build might hold value. A loud, specific, deeply personal build usually does not, whatever it cost to create.

Your insurer is not valuing your passion. It is valuing a car it might have to sell.

That is precisely why agreed value exists, and precisely why “I spent $30,000 on it” is not an argument that works at claim time unless you agreed that number in writing first.

Track Days and Racing: The Exclusion Nobody Reads

If you take your car to a track, read this before you go.

Racing, timed events, and competitive driving are excluded from essentially every standard auto policy, and from collector policies too. Hagerty sells a separate product, Motorsports Advantage, precisely because on-track activity is not covered under a normal policy. Any “top 10” list telling you a collector policy includes track day coverage is wrong, and it is the kind of wrong that ends with an uninsured car on a flatbed.

If track days are part of your plan, buy track-day coverage specifically. It exists. It is not expensive relative to what you are risking.

Modified Car Insurance in the UK, Australia, New Zealand, and Ireland

Worth flagging honestly, because a lot of the search traffic for this question is not American.

This guide covers the US market. The UK, Ireland, Australia, and New Zealand handle modifications quite differently, built around declared modifications and a well-developed specialist broker market that has no direct US equivalent. The core principles carry over, and disclosure matters just as much or more. The carriers, the caps, and the legal framework do not.

If you are outside the US, use this page for the concepts and get your quotes from a specialist broker in your own market. We would rather say that than pretend to knowledge we do not have.

The Honest Read: What to Actually Do

Answer the daily driver question first. It decides which half of the market you are shopping. Everything else is downstream, and it saves you a week of quotes that were never going to work.

If it is a weekend car, go specialist and get agreed value. Hagerty, Grundy, American Modern, J.C. Taylor. Cheaper than you expect, because low mileage is the whole point.

If it is your daily, be realistic. Standard carrier, buy CPE, and accept that a serious build is partly uninsured. Check Safeco’s regular-use option first, since 10,000 miles a year is the closest the collector market gets to a real car.

Never accept “stated value” thinking it is agreed value. Ask the total loss question in writing.

Declare every modification, including the ones you inherited when you bought the car. This is the one that quietly destroys claims.

If you spent five figures on the build, stop reading top 10 lists and call a specialist broker. Your car is a placement problem, not a comparison-site problem.

Final Word on Insuring a Modified Car

The reason this topic is so badly served online is that “best insurance for modified cars” gets answered as a shopping list when it is actually a sorting question. Hagerty and Progressive are not rivals. One insures a car you love and rarely drive, the other insures a car you rely on and happened to change. Putting them on the same list tells you nothing and wastes your afternoon.

Sort yourself first. Daily driver or not. Then get agreed value if you can, buy CPE if you cannot, declare everything either way, and never assume the word “stated” means what “agreed” means.

Americans spent over $52 billion on parts last year. A depressing share of that is currently insured for about a thousand dollars.

FAQs

What is the best insurance for modified cars?

It depends on whether the car is your daily driver. If it is not, specialist agreed value insurers like Hagerty, Grundy, and American Modern are strongest, but most will not insure a daily driver at all. If it is your daily, a standard carrier plus Custom Parts and Equipment coverage is usually your only route.

Do modded cars cost more to insure?

Usually yes, because insurers price both the higher crash risk and the higher payout value. Performance modifications like tuning, turbochargers, and exhaust work raise premiums most, while aesthetic changes often barely move the rate.

Do I have to tell my insurance if I modify my car?

Yes, every time, before or immediately after the modification. Failing to disclose is treated as material misrepresentation, which lets your insurer deny the claim and void the policy regardless of fault, leaving you personally liable for damage, injuries, and legal costs.

What happens if I don’t disclose modifications?

Your claim can be denied and your policy voided, meaning you pay for everything out of pocket. Deliberately withholding details to keep your premium down can also constitute insurance fraud, and it can affect your ability to get coverage elsewhere.

What if I bought a car that was already modified?

You still have to declare the modifications, even though someone else fitted them. Adjusters routinely spot aftermarket parts during post-accident inspections, and claims get denied for failure to disclose even when the current owner did none of the work.

What is the difference between agreed value and stated value?

Agreed value pays the full insured amount you agreed in advance, with no depreciation, on a covered total loss. Stated value lets the insurer pay either the depreciated cash value or the replacement cost, whichever is lower, so it is a ceiling rather than a promise.

How much custom parts coverage do standard insurers offer?

Usually between $1,000 and $5,000. Progressive includes $1,000 with collision and comprehensive and sells up to $5,000 more, Elephant includes $1,000 automatically, and Esurance offers up to $4,000. Coverage typically costs around $102 a year.

Will Hagerty insure my daily driver?

Generally no. Hagerty’s own eligibility guidelines state the vehicle cannot be a daily driver and list daily-use cars as ineligible, and every licensed household member must have a separate regular-use vehicle insured in their own name.

What car modifications won’t affect insurance?

Safety and security upgrades such as alarms, immobilisers, trackers, backup cameras, and parking sensors often earn a discount rather than a surcharge. Accessibility modifications are protected under ADA guidelines, so insurers cannot use them to raise your rate or deny coverage.

Do modifications decrease car value?

Often yes, which surprises people. Some modifications lower a car’s actual cash value because heavy personalisation shrinks the buyer pool, and a lower value means a smaller payout if the car is totalled. Your insurer values a car it might have to sell, not the money you spent.

Are track days covered by modified car insurance?

Almost never. Racing, timed events, and competitive driving are excluded from standard and collector policies alike, which is why Hagerty sells Motorsports Advantage as a separate product. If you track your car, buy track-day coverage specifically.

Is $300 a month a lot for modified car insurance?

For a modified performance car with full coverage, that is fairly ordinary rather than alarming. The better question is what the premium actually protects, since $300 a month covering an agreed value on your build beats $150 a month that pays book value on a stock car you no longer own.

Is it better to have a $500 or $1,000 deductible?

Take the higher deductible only if you could pay it tomorrow without strain. The premium saving is real but modest, and a deductible you cannot afford is how people end up not filing a claim on a car they spent years building.

Does insurance cover illegal modifications?

Generally no. Insurers will not cover modifications that break federal or local law, including emissions tampering, exhausts over legal noise limits, non-DOT lighting, illegal window tint, and lifts above legal height. An illegal modification that contributes to a crash complicates both your claim and any lawsuit.

Is modified car insurance the same in the UK and Australia?

No. This guide covers the US market, while the UK, Ireland, Australia, and New Zealand use a declared modifications framework and a specialist broker market with no direct US equivalent. The disclosure principle carries over, but the carriers, caps, and legal rules do not.

About the Author

Md Shahinuzzaman is an Insurance and Out-of-Pocket Healthcare Cost Specialist with 16 years of experience in banking and insurance. He writes plain-English guides that help people find the gaps in their coverage before those gaps find them. Every figure on this page traces to a named source, and where a number cannot be verified, it is not published. This article is general information and not financial or legal advice. Reviewed July 2026.

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