Car insurance for custom-built cars

Find the right insurance for a custom machine.

Custom cars need insurance just as much as standard models, maybe even more so. They’re often one of a kind and need to be well protected.

Car insurance for custom vehicles follows many of the same rules that apply to other vehicles, but there are still some particular features to look for, and ways to help keep the costs down.

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What is covered?

The only type of car insurance that can protect your vehicle from a wide range of damage, including accidents, collisions, fire, flooding and much more, is comprehensive car insurance. To protect a valuable, unique vehicle it’s reasonable to say that this is the most appropriate type of cover.

However, everyday comprehensive car insurance will generally not have all the features and benefits you need. You may require a few benefits that are more commonly found with custom car insurance.

  • Agreed value cover: Get your car insured at a set agreed-upon value, rather than whatever its supposed market value, subject to depreciation, happens to be.
  • Modifications cover: The value of street legal modifications can be factored into the car’s agreed value, while modifications can, in themselves, be insured against damage like almost any other part of the car.
  • Choice of repairer: You can find policies that cover the cost of repairs at your choice of repairer, instead of the insurer’s. If you have a custom build, this means you may be able to take it back to those who know it best.
  • Salvage rights: Typical car insurance policies will often let the insurer claim salvage (the car) in the event of a total loss where the cost of repairing it would be worth more than the car’s insured value. Custom car insurance policies can give you salvage rights over your vehicle, so you can claim the maximum amount allowable under your policy while retaining salvage rights over the car.
  • Air freight import cover: Custom vehicles might need special parts, whether custom made or imported from overseas. Standard policies will often not cover these additional expenses.

As you can imagine, these are all important differences. If you have a unique car, you may not want a policy that doesn’t include these features. Looking for car insurance policies geared towards enthusiasts, collectors or prestige cars can make it easier to find these features.

If you’re a collector, many insurers will also offer multiple vehicle discounts when more than one car is being insured. If it’s not your daily ride, you can often get limited use discounts to reduce premiums, or find policies with lay-up periods.

With these enthusiast or prestige-type car insurance policies you also generally get the usual benefits of comprehensive car insurance, which include the important cover types such as:

  • Accidents
  • Theft and damage caused by attempted theft
  • Vandalism
  • Fire
  • Storms and flooding
  • Earthquakes, tsunamis and other hazards
  • Third party property damage, for damage to other vehicles or property

Additional options to consider

Policies can include a range of additional benefits and options to help you get more out of your cover. Sometimes these will take the form of automatic inclusions, while sometimes they’ll come as optional extras. Some of the features you might want to consider include:

  • Transport, towing and storage: Cover for the cost of transporting and storing a vehicle that cannot be driven, and towing from the scene of an event.
  • Keys and recoding: New keys and recoding of locks if your keys are stolen.
  • Replacement hire car: Covers the cost of a hire car while your vehicle cannot be driven.
  • Trailers: Equivalent cover for trailers that are being towed by the insured car.
  • Additional broken glass cover: Being able to make claims for the windscreen or broken glass without needing to pay an excess, or with a reduced excess.
  • Personal belongings: Cover for your belongings in the vehicle at the time of an event.
  • Returning your vehicle after repairs: The cost of transporting your car to you after repairs, if the repairer is a long way from your home or workplace.
  • Roadside assistance: Many insurers also operate roadside assistance networks, which can be useful in the event of a breakdown or accident.

In all cases, you are generally only able to take advantage of these options following an insured event. In other words, the cause of the damage or loss needs to be covered under your policy, without exclusions applying, in order to take advantage of these features.

Exclusions to be aware of

Similar exclusions will generally apply to custom car insurance as with standard cover.

  • No cover while under the influence of drugs or alcohol, or if the driver refuses to take a breath test following an accident
  • No cover while on a race track, competing in events and similar
  • No cover for wear and tear, rust, corrosion or similar deterioration
  • No cover for loss or damage resulting from a failure to maintain your vehicle
  • No cover if your vehicle was being driven while not street legal, or not meeting safety and design standards in the place it was being driven
  • No cover while being used for business purposes, such as carrying passengers for profit, unless this is specifically covered under the terms of your policy
  • No cover while being driven off-road
  • No cover for tyre damage resulting from road cuts, punctures, bursts or the application of brakes
  • No cover for vehicles modified to perform outside of the manufacturer’s specifications except with explicit approval from the insurer, or while a vehicle was being used in a manner inconsistent with manufacturer recommendations, such as by being overloaded
  • No cover for damage or loss resulting from poor workmanship or faulty repairs, unless the repairs were conducted with the insurer’s approval by an approved mechanic

Excess that will be charged

Your policy will include at least one excess, and possibly more. This is a cost to be paid when you make a claim and you will need to pay all applicable excesses prior to the insurer paying out.

These may vary between insurers and policies and it can be worth looking at which ones will apply to you on a case-by-case basis.

  • Basic excess: The standard excess that applies to car insurance. Some insurers will give you the option of picking a higher excess for lower premiums, or a lower excess for higher premiums.
  • Age excess: Drivers under 25 may incur an additional excess.
  • Inexperienced driver excess: Inexperienced drivers, such as those on a learner or provisional licence, might have an additional excess. Sometimes this will only apply to drivers over the age of 25, in lieu of the age excess.
  • Unapproved driver excess: Depending on the policy, your insurance might not cover anyone who’s not listed on your policy to drive the car, or an unlisted driver excess might apply.

How much are custom car insurance premiums?

Your premium is the ongoing cost of car insurance, affected by numerous factors including:

  • The value of your car. The agreed value, at which your car is insured, directly affects your premium.
  • Your age and gender. Under 25s and male drivers are statistically higher-risk drivers and may have higher premiums.
  • Your insurer and policy. Premiums are dependent largely on the options and features included in your policy, and your insurer. It’s worth getting a range of quotes and being mindful of cover differences to find value for money.
  • Your location. Areas that are at higher risk of theft or accidents may have higher car insurance premiums.
  • Where you garage your car. You can get lower premiums by keeping your car in an enclosed and secured garage overnight, instead of parking on the street. Note that the garaging option you select on the policy is when you’re covered. For instance, you might not be able to make a claim for losses that occurred while your car was parked on the street overnight if you said you park it in a garage every night.

What to look for in a policy

Some policy features are near-essential for custom-built, individually constructed or heavily modified cars. You may want to specifically look for a policy that gets you agreed value, your choice of repairer, salvage rights and additional cover for machined or imported replacement parts.

For purely cosmetic modifications, insurers will typically be able to cover them as long as they’re approved ahead of time. Getting cover for performance-enhancing modifications can be more difficult, as different insurers might agree to cover different ones on a case-by-case basis.

Other than these, you’ll generally want to look at:

  • The price. Consider both the excess and the premiums.
  • The cover and exclusions. What is and what isn’t covered.
  • Repair, replacement and reimbursement conditions. What exactly you are entitled to in the event of damage or loss.
  • The options and inclusions. It can be worth making sure your policy has the features you need, such as covering the cost of returning your vehicle to you following repairs if your chosen repairer is a long way away. To help keep costs down, it may also be worth looking for policies that don’t cover the things you don’t need.

Picture: Shutterstock

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