Custom Parts and Equipment Insurance: What It Covers and Why You Shouldn’t Skip It

Car customization is one of the most exciting ways to personalize a vehicle, whether it’s sleek new rims, a premium sound system, or a custom paint job that makes your car stand out. But here’s the catch: standard auto insurance usually won’t cover those upgrades.

Insurers calculate policies based on your car’s original factory build. That means your aftermarket additions — no matter how valuable — often aren’t included unless you add extra coverage. This is where Custom Parts and Equipment (CPE) insurance comes into play.

What Is Custom Parts and Equipment Insurance?

Custom Parts and Equipment insurance is an optional endorsement you can add to your existing auto policy. It’s designed to cover aftermarket modifications that enhance your vehicle’s look, comfort, or performance.

Typical coverage limits: $2,000–$10,000 (most common is $5,000)
Cost: Just a few extra dollars per month (about 10% of the modification’s value)
How it works: Added onto your collision or comprehensive coverage with the same deductible applying

This means if your car is stolen, vandalized, or involved in an accident, your aftermarket parts will also be protected.

What Mods Need Extra Insurance?

Any part added after your car left the factory is considered a modification. Common examples include:

Custom rims and oversized tires
High-end stereos, speakers, or entertainment systems
Leather upholstery and seat covers
Roll bars and strut bars
Custom paint jobs, wraps, and decals
Navigation systems and infotainment upgrades
Bed liners, running boards, trailer hitches
Fog lights, undercarriage lighting, and tinted windows

If you’ve invested in these types of upgrades, a CPE endorsement ensures you don’t lose your investment in the event of a claim.

What Isn’t Covered by CPE?

While CPE covers most aftermarket parts, there are exclusions:

Illegal or unsafe modifications (like extreme suspension lifts)
Homemade or DIY parts
Snow plowing equipment
Repairs exceeding your coverage limit

Standard Insurance vs. CPE Insurance

Feature	Standard Auto Insurance	Custom Parts & Equipment (CPE) Insurance
Factory-installed parts	Covered	Covered
Aftermarket upgrades	Not covered (except rare cases)	Covered, up to policy limit
Coverage limit	Vehicle’s factory value	$2,000–$10,000 (most common: $5,000)
Cost	Base premium	+ Few extra dollars/month (~10% of mod value)
Deductible	Standard deductible applies	Same deductible applies

Do Regular Policies Ever Cover Aftermarket Parts?

In some states, up to $1,000 of aftermarket parts may be automatically included. Certain safety-related upgrades, like anti-theft devices, may even earn you a discount.

But don’t assume “full coverage” includes modifications. Full coverage only means liability, collision, and comprehensive — not your custom parts.

Why Inform Your Insurer About Mods?

Failing to disclose aftermarket parts can backfire. If the modifications compromise safety (engine boosts, spoilers, unsafe suspension changes), your insurer could deny claims altogether.

Always notify your provider if you add mods. Not only does this protect you, but it also ensures your insurer can properly cover your upgrades.

FAQs About CPE Insurance

Does insurance cover rims?

Factory rims? Yes, under collision or comprehensive.
Aftermarket rims? No, unless you have CPE.

Which insurers offer CPE coverage?
Providers like Progressive, Farmers, and Elephant Insurance commonly offer it.

How much does it cost?
On average, just a few dollars more per month. Expect premiums to rise ~10% of the modification’s value.

Final Thoughts: Is CPE Coverage Worth It?

If your vehicle is stock with no modifications, standard insurance works fine. But if you’ve invested in aftermarket upgrades, you need CPE insurance to protect that investment.

For just a small monthly cost, you can safeguard thousands of dollars’ worth of enhancements. It’s the difference between losing your upgrades entirely and getting reimbursed if the unexpected happens.