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No Insurance Coverage: Forming A Policy Against Tuners

(08:30 April 02, 2004)
No Insurance Coverage: Forming A Policy Against Tuners
Insurance—Or Lack Of It—May Spell The End For Sport Compact Enthusiasts



By ANDREW LUU



Canadian Ron Shortt is a far cry from the fast and furious type: The 47-year-old Toronto man drives a 2002 Pontiac Sunfire back and forth to his job as a computer information technology specialist, and his driving record is snow-white clean—no accidents, no tickets.

None of that mattered when Shortt decided to dress up his Sunfire with off-the-shelf, bolt-on interior parts, special wheels, a trick exhaust and lowered springs. In response, his insurer of 15 years, State Farm, canceled his policy, citing the lowered springs as a big no-no.

As with muscle cars of yore, which faded away as much because of jacked-up insurance rates as the triple whammy of high gas prices, government emissions rules and safety regulations, insurance companies are embarking on a collision course with the booming population of drivers who insist on tuning their sport compact rides.

“The insurance industry may be able to accomplish what the police could never do,” says Shortt, “by making all these cars illegal to be on the streets because they can’t get coverage.” Shortt eventually wound up back with State Farm, but not before he reinstalled the factory springs and had the work verified by an insurance company adjuster.

Steve Budzinski of Ottawa also was dropped by State Farm because of performance upgrades to his Acura Integra Type-R. “My underwriter flat out told me it no longer wants to insure modified cars,” said Budzinski.

State Farm Canada spokes-man Derek Fee says the insurer has no blanket policy to refuse coverage to the sport compact segment, but he acknowledges some sport compact owners—particularly those involved in street racing—are a growing concern. “That subculture is causing difficulties for the rest,” Fee says.

In the United States, major insurers like AAA and State Farm say sport compacts aren’t a problem—at least not yet. State Farm spokeswoman Ana Compain-Romero says the company has no issues with minor upgrades such as lowered springs and tuned exhaust systems, but she recommends informing your agent about any modifications, especially when you go from minor to major. Changes discovered after the fact (say, after an accident when an owner is trying to collect against the policy) may void the coverage.

“Changes are subject to an agent taking a look and an underwriter deciding if we can extend coverage,” Compain-Romero says.

That kind of talk has some people worried Canada’s sport compact insurance woes could be a precursor of similar trouble in the United States. Steve McDonald, senior director of government affairs for the Specialty Equipment Market Association, says the aftermarket group is keeping an eye on the situation and gathering information.

“We’re not sure how widespread it is,” McDonald says. “We are alarmed by the possible implications of this.”

Meanwhile, auto manufacturers are powering ahead with plans for performance models, as well as building up their inventories of performance parts that can be used to turn their sport compact entries into tire-ripping street burners. Automakers contend they are merely responding to demand from customers who want performance.

Are they concerned about potential insurance pitfalls? “To a degree, yes,” says General Motors sport compact expert Bob Kern. “But 90 percent of kids say ‘So what?’ Most kids are dedicated to the cars and aren’t really reading the fine print. I think a lot of them don’t know they could invalidate their policies by modifying their cars.”
 

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FWIW...My car was totaled. One Beacon Insurance is my carrier. Not only were my modifications NOT A PROBLEM, but they said they'd also pay me for any of the mods for which I can produce receipts. (Plus they let me remove some of the mods before they sold it off for parts). :thumbup:
 

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wow!! I know that guy..I work with him, I was not aware about this...
 

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natskiboy said:
wow!! I know that guy..I work with him, I was not aware about this...
You have GOT to be kidding... Give him my condolensces. Advise him that a Passat will never be a 'sport compact'.
 

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Imagine installing springs & shocks and bigger brakes to make your car handle & stop better and the insurance companies have a problem with that... :roll: :crazy:
 

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I think this is part of the Canadian insurance industry's response to the public outcry about high insurance costs. It's a real problem (high costs) in a number of provinces, with the threat of monopolistic provincial-run insurance hanging over the companies' heads. This is the kind of thing that the general populace (i.e., those that don't care about their cars) can latch onto and say, "well, finally, they're doing something."

You gotta remember, Canada ain't just another state. They do their own thing, their own way, up there.

Meanwhile, auto manufacturers are powering ahead with plans for performance models, as well as building up their inventories of performance parts that can be used to turn their sport compact entries into tire-ripping street burners. Automakers contend they are merely responding to demand from customers who want performance.

Are they concerned about potential insurance pitfalls? “To a degree, yes,” says General Motors sport compact expert Bob Kern. “But 90 percent of kids say ‘So what?’ Most kids are dedicated to the cars and aren’t really reading the fine print. I think a lot of them don’t know they could invalidate their policies by modifying their cars.”
I guess GM isn't going to be labelling their performance parts with a warning that your insurance may be found invalid if the part is installed. Wonder what that does if a kid with tricked out sport compact crashes into someone else? What does the carrier say to the injured party..."Sorry our former customer, Mr Riceboy, doesn't have any coverage?" Screw that.
 

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Canada's high insurance cost?
Curious what that is. I live in California, Capitol of High Insurance Prices!
 

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OCTICK said:
Canada's high insurance cost?
Curious what that is. I live in California, Capitol of High Insurance Prices!
I dunno how high...maybe some of our Canadian members can address that issue. I can tell you that the cost of auto insurance has played a role in the elections in New Brusnwick and Nova Scotia...

Here's a couple of quotes from the CBC's website:

In New Brunswick, Premier Bernard Lord nearly lost the 2003 provincial election because of his perceived neglect of the insurance issue. In the year ending April 2003, auto insurance rates in his province rose 41.2 per cent, leading many in New Brunswick to demand government action. Lord has since said he will set up a committee to look at insurance rates.
In Nova Scotia, John Hamm's Tory government has developed a plan it says will lead to a 20 per cent rate reduction. It will create a provincial Insurance Review Board that will monitor insurance issues and protect consumers against rate increases. The plan includes placing caps on compensation payouts for some injuries.

In Ontario, where auto insurance rates have risen 27.7 per cent, Premier Ernie Eves says there is a bill in the works aimed at capping rates.
That's some hefty rate increases.
 

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OCTICK said:
Canada's high insurance cost?
Curious what that is. I live in California, Capitol of High Insurance Prices!
Just for comparison:

My 18 YO daughter = $283.33/month

21 YO son = $214/month

I can feel this in my Ar$E! :cry:

On topic, the insurance should only void insurance coverage if they can prove that the modification is the cause of accident.
 

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powerslide23 said:
On topic, the insurance should only void insurance coverage if they can prove that the modification is the cause of accident.
powerslide23 - do you have a background in this area or is this just a guess? I always assumed that in your policy there is probably a statement saying that performance modifications to the vehicle must be disclosed and if they're not then the policy is void. I don't know if this is the case or not.

Anybody know the answer to this one? Is there a specific clause in most policies that addresses performance mods? I'll have to read mine again one of these days.



Also, if my wing hits the awning over the drive through at the dairy queen will they cover that?
 

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I dunno how high...maybe some of our Canadian members can address that issue. I can tell you that the cost of auto insurance has played a role in the elections in New Brusnwick and Nova Scotia...
dam right and they are only continuing to hike up rates.
the worst thing is the insurance companies made something like a 786% profit last year off of us and they have the balls to tell us they need to raise our rates to cover for lawsuits and $hit :suspicio: , thats plain f :mad: cking bull$hit.And to better things our DICKWEED of a premier has done absolutely nothing to help us :mad: :mad: all empty promises that lying b :wink: stard
 

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gjd6640 said:
powerslide23 said:
On topic, the insurance should only void insurance coverage if they can prove that the modification is the cause of accident.
powerslide23 - do you have a background in this area or is this just a guess?
This is only my opinion and hope it is that way. :wink:
 

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my policy doesn't have anything like that in the fine print, although it does have a clause regarding racing or competition (which sounds like it includes autox but not HPDEs). There was a section regarding furniture in a RV, too. Worst of all, the bastards aparently won't cover a car damaged in a nuclear blast :mad:
 

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The insurance company I work for in Hawaii surcharges (roughly 60%) for modified vehicles. It's been that way since I started here 2+ yrs ago. The company I was with previously did not allow modifications and required inspections before writing the policy. My current company doesn't consider intakes, exhasuts, brakes, etc as mods but we do consider lowering, turbo upgrades, etc.

We ask about modifications when quoting and on our applications so if someone states that it's not modified and signs the application we can void the policy and not provide coverage since they misrepresented the facts on their application. The truth is though, I haven't ever seen our adjusters deny coverage due to modifications. We will not pay for the aftermarket parts though unless you schedule them on your policy and provide receipts.

I have no doubt that we have many many customers with modified vehicles and we don't know about it. We currently don't inspect or require pictures but thats changing soon.

Every company is different and you will need to read your policy to see what it says about modifications or alterations.
 

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Yeh, but it's OKAY :thumbup: to LIFT your truck to the sky!!! That's safe! Go for it! See how fast you can flip over! :crazy: :mad:

And what about cars that come stock with springs of the same type? (A4 sport package, Corvette, etc.)....no insurance for those either? :suspicio: :weirdo:

My last 4 cars have been lowered, and the only thing the springs have done for me is saved my ass a few times by making the car more manueverable.

..guess i'll be driving insurance-less if they try to pull that shit on me. or i'll start my own damn insurance company, mark my words.

-harry

ahhh....how pleasant is it that insurance companies are forcing people to drive rollling bathtubs. :roll:
 
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