Do You Need Special Insurance Coverage if You Install Stereo or Audio Equipment?

Last Updated on May 15, 2021

Few things give personality and character (or headaches, depending on your point of view) to a regular car like a state-of-the-art sound system. A regular, boring 2012 Chevy Malibu now becomes the coolest car in the neighborhood.

This fame brings peril. Everyone is jealous of your decked-out stereo system, and everyone knows you have it. That’s why car stereo systems are one of the most stolen items in the auto industry. It’s also why you should think about insuring it.

Are Audio and Stereo Systems Covered by Regular Auto Insurance?

To be clear, factory-installed audio equipment is covered under a regular auto insurance policy, but only if you have either Comprehensive or Collision coverage. Comprehensive coverage is the one that covers theft, so this is especially an important one to carry.

Before we get into the details of Comprehensive or Collision coverages and how it applies to specialty audio equipment, does the auto policy cover your expensive custom stereo system?

The answer here is, usually not. Most regular auto insurance policies will not automatically cover custom parts and equipment, including stereo and audio systems.

Be Sure to Tell Your Insurance Company

Most insurance companies offer an endorsement, or add-on, that covers custom parts and equipment. To get this, all you need to do is ask your insurance agent or company to add it on. You’ll need to give them a very basic description of what you have and the value, and they can simply tack it on to your existing policy. In some cases, you might need to show an appraisal if the value is higher than average.

One key here is that your auto policy, even with the custom parts and equipment, will only cover permanently installed equipment. This means that if you have portable equipment, you’ll either need to add personal contents coverage to your auto policy (ask your company for this endorsement) or have a homeowners or renter’s policy in place that will cover this type of equipment.

The premium for custom parts and equipment coverage is usually inexpensive, especially when compared with the overall cost of the audio equipment you’ve bought.

There are a few companies out there that include a base amount of coverage for custom parts and equipment. Usually, it will be an amount no greater than $3,000.

The important thing to do is just to call your insurance company and ask for this coverage.

If your auto insurance company says that they won’t cover your stereo system, you’ll need to find a company that will. But before you cancel your policy, make sure you’ve lined up your new policy first. Be 100% sure that they are going to cover your equipment for the full value that it’s worth, start the policy, and then cancel the old one. You don’t want to be left with a gap in coverage.

Comprehensive, Collision, or Both?

The simple answer is, you’ll probably want both Comprehensive and Collision coverage. If you have very expensive equipment, then having both coverages will fully protect it, no matter what happens to it.

For example, your equipment won’t be covered if you sideswipe another car, total your vehicle AND you only have Comprehensive coverage. That accident would fall under Collision coverage, and your audio equipment won’t be covered.

Remember, you can have Comprehensive without Collision, but you can’t have Collision without Comprehensive.

If your main worry is theft, then you definitely need Comprehensive coverage. Theft is only covered under Comprehensive.

Another important thing to keep in mind is your deductibles. If your stereo system is stolen and you have the custom parts and equipment coverage you need, the company will pay for the value of the equipment minus your deductible.

This means that if you have a $500 deductible and $3,000 worth of equipment that is all stolen, the company will pay you up to $2,500 to replace it.

If you lower your deductible to $100 or $250, your auto premiums will go up, so you’ll need to find a good balance that fits your equipment as well as your insurance budget.

Insuring specialty audio or stereo equipment in your car is usually not an automatic coverage, but it is possible to obtain. Each company handles it a little differently, so you will need to be upfront with your insurance company before you buy and install it.