Custom Parts and Equipment Coverage Explained

Last Updated on May 15, 2021

Your car insurance policy might mention custom parts and equipment coverage. Custom parts and equipment coverage, also known as CVE, covers unique parts and accessories added to your vehicle.

CPE is an endorsement, which means it supplements existing coverage. By adding custom parts and equipment coverage to your policy, your insurer covers certain parts of your vehicle that are permanently installed, including devices, accessories, enhancements, and other changes you have made.

Confused about custom parts and equipment coverage? Debating whether or not to add CPE to your auto insurance policy? Keep reading to discover everything you need to know about custom parts and equipment coverage.

Table of Contents:

• What Is Custom Parts and Equipment Coverage?
• Why Add Custom Parts and Equipment Coverage? 
• Standard Insurance Does Not Cover Custom Parts
• What Does CPE Cover?
• What Is Not Covered by Custom Parts and Equipment Coverage?
• Custom Parts and Equipment Coverage Limits
• Does CPE Raise Car Insurance Premiums?
• How to Add CPE to My Car Insurance
• Other Things to Consider Before Modifying a Vehicle

What Is Custom Parts and Equipment Coverage?

Custom parts and equipment coverage (CPE) is an optional endorsement you can add to your car insurance policy. You pay a few extra dollars per month to add CPE to your policy.

CPE covers permanently installed custom parts or equipment on your vehicle. If you have installed a spoiler, after-market stereo, wheelchair lift, or other parts to your vehicle, then CPE could cover these components.

If you have added items to your vehicle that alter the performance, appearance, or function, then these items could fall under CPE.

Things like custom paint jobs fall under CPE, as do things like electronic equipment, custom tires, and custom lighting.

If your car is damaged in a covered incident, then insurance will compensate you for the cost of repairing or replacing your custom parts or equipment.

Why Add Custom Parts and Equipment Coverage?

Custom parts and equipment coverage gives you more coverage for certain components on your vehicle. Without CPE, you could be forced to pay thousands of dollars out of pocket after an accident.

Insurance covers standard parts of your vehicle. Most stock parts of your vehicle are covered by insurance, including any items permanently installed by the manufacturer. In an accident, your insurer will compensate you for the cost of repairing or replacing those standard components.

However, custom parts work differently. If you add custom parts to your vehicle, then insurance will not automatically cover these components.

Drivers who add custom parts to their vehicles can buy supplemental CPE coverage. After adding a CPE endorsement to your policy, your insurer will cover your custom parts and equipment.

Standard Insurance Does Not Cover Custom Parts

You buy car insurance to protect your vehicle. However, standard car insurance policies do not cover everything in your vehicle. A standard car insurance policy does not cover aftermarket parts, for example, or other additions made to your vehicle. Standard car insurance policies also do not cover wear and tear or other maintenance issues.

If you have not added custom parts to your vehicle, then a standard policy should work fine. It covers your vehicle from most incidents.

However, if you have added any aftermarket parts to your vehicle, then you may need custom parts and equipment coverage to cover these parts. Some drivers add thousands of dollars in customizations to their vehicle, only to be shocked when insurance refuses coverage for those parts. Unless you have custom parts and equipment coverage, your standard insurance policy will not cover custom parts.

What Does CPE Cover?

Custom parts and equipment coverage varies between insurers. Some insurers cover virtually anything permanently installed on your vehicle. Other insurers have exclusions that limit coverage.

Generally, custom parts and equipment coverage covers all of the following:

• Any dealer-installed equipment that is not offered by the original vehicle manufacturer
• Custom paint jobs, murals, decals, and graphics
• Anti-theft devices not installed by the vehicle manufacturer
• Customized wheels, including alloy or magnesium wheels, custom tires, custom spinners, and similar parts
• Added chrome
• Special tires, including custom wide-tread tires or oversize tires
• Unique equipment like running boards, roll bars, fog lights, camper shells, trailer hitches, and brush bars
• Spoilers
• Custom suspensions and other performance equipment
• Wheelchair lifts and similar disability equipment

CPE can also cover certain electronics within your vehicle, assuming those electronics are permanently installed in your vehicle. It can cover TVs and DVD players, for example, that you installed permanently in your vehicle.

Generally, any parts added to your vehicle by you, your dealership, or any other party that aren’t from your original equipment manufacturer can be covered by custom parts and equipment coverage.

What Is Not Covered by Custom Parts and Equipment Coverage?

Custom parts and equipment coverage does not cover all added components on your vehicle. It doesn’t cover illegal modifications, for example. Many policies also have specific exclusions that forbid coverage for certain aftermarket modifications.

Common exclusions with custom parts and equipment coverage include:

• Illegal modifications, including nitrous oxide, underbody lighting, or dark windshield tinting (if illegal in your state)
• Custom parts that exceed your limit (typically $5,000 to $20,000 per policy)
• Homemade modifications
• Suspension kits that raise your vehicle more than four inches
• Snowplowing equipment

Contact your insurer to verify that is covered and is not covered by CPE. Exclusions vary between companies.

Custom Parts and Equipment Coverage Limits

Policies vary between insurers and states. Generally, however, custom parts and equipment coverage has a $5,000 to $20,000 limit.

Sometimes, your state dictates your custom parts and equipment coverage. Some states only allow insurers to cover a maximum of $5,000 of CPE, for example.

Your insurer will cover the cost of repairing or replacing your custom parts up to your limit, minus your deductible.

For damaged parts and equipment above that limit, you will need to cover the costs out of pocket.

Does CPE Raise Car Insurance Premiums?

Custom parts and equipment coverage is an endorsement, which means you pay to add it to your insurance policy.

Most drivers will pay a few extra dollars per month to add CPE to their policy. Because CPE has a relatively low limit, it’s unlikely to significantly raise your rates.

As a general rule, most insurers raise premiums by around 10% of the total value of the modifications. If you have added $5,000 of modifications to your vehicle, for example, then your premiums could go up by $500 per year.

However, if you have expensive modifications on your vehicle or high-end equipment, then you could pay significantly more for CPE. The more custom parts and equipment are on your vehicle, the more risk your insurer assumes, and the higher your CPE will be.

How to Add CPE to My Car Insurance

Adding custom parts and equipment coverage to car insurance is easy. Generally, you can contact your insurer and add it to your policy instantly.

Most drivers can add around $5,000 in CPE coverage to their existing policies for just a few extra dollars per month.

It’s a bad idea to hide customizations from your insurer. Even if it’s a small customization, it could impact a future claim. Insurers have even been known to outright deny claims from drivers who customized their vehicles without informing their insurers.

Other Things to Consider Before Modifying a Vehicle

Modifying a vehicle can change the way insurance claims work. Other things to know before modifying a vehicle include:

Consider switching to a new insurer. Not all insurers offer custom parts and equipment coverage, and some insurers have strict policies on vehicle modifications.

Understand exclusions. Even if you have custom parts and equipment coverage, it might not cover illegal modifications, unprofessional modifications, high lift kits, and other parts. Check the exclusions on your policy to verify coverage.

Avoid hiding customizations from your insurer. If your car is worth more after being modified, then your insurer needs to know about this change. Otherwise, you’ll receive less for a claim than the vehicle is worth.

Request confirmation in writing. Vehicle modifications can be unique. If you’re unsure if your unique modification is covered by CPE, then request clarification in writing from your insurer. It could make a difference in a future claim.

Final Word on Custom Parts and Equipment Coverage

Custom parts and equipment coverage is an endorsement you can add to your policy for added coverage. In exchange for a few extra dollars per month, you get coverage for any custom parts added to your vehicle.

CPE covers items that you, your dealership, or a third party added to your vehicle. Standard car insurance only covers components that your manufacturer added to your vehicle. CPE supplements your policy by covering things like custom paint jobs, electronic equipment, custom tires, spoilers, and more.

To learn more about custom parts and equipment coverage and how it works, contact your insurer.