Custom parts and equipment coverage (CPE) is an optional endorsement that you can add to your standard auto insurance policy. CPE provides additional coverage for aftermarket parts and accessories that you have permanently installed on your vehicle. These can include parts that alter the performance, appearance, or function of your vehicle beyond what was originally installed by the manufacturer. CPE supplements your existing collision and comprehensive coverage, and may be subject to the same deductibles. It covers non-OEM parts added by a dealer or third party. This section will provide an overview of CPE and what it covers.
What is Covered by CPE
CPE provides coverage for various aftermarket parts and accessories that are permanently installed on your vehicle. Here are some examples of parts that would be covered:
Custom wheels and tires: This includes alloy, magnesium, or aluminum wheels not installed by the manufacturer. It also covers custom spinners, custom wide-tread tires, oversize tires, and racing slicks.
Spoilers: Aftermarket spoilers and wings would be covered.
Performance parts: Upgraded or customized components related to performance are covered, such as:
Suspension parts like lowering kits, coilovers, or air suspension
Turbochargers, superchargers, intake and exhaust systems
ECU tuning and engine mods
Brake upgrades
Custom paint and decals: Any paint job, decals, graphics, or wraps would be covered if damaged. This includes custom colors, murals, stripes, and more.
Anti-theft devices: Alarm systems, steering wheel locks, brake locks, wheel boots, and other anti-theft devices added after purchase.
Electronics like TVs, DVD players, and screens installed by a dealer would also be covered, provided they are permanently mounted.
Other examples of special equipment that CPE would cover includes:
Running boards
Fog lights
Bed liners
Hitches
Lifts
Lowering/lifting kits
Roll cages
Roof racks
Winches
Brush guards
Camper shells
Type of Part |
Examples |
|---|---|
Wheels/Tires |
Custom rims, spinners, racing tires |
Body |
Spoilers, hoods, body kits |
Performance |
Engine, suspension, brake mods |
Interior |
Aftermarket seats, steering wheels |
Electronics |
Radios, TVs, GPS, cameras |
Other |
Lifts, racks, guards, hitches |
In summary, CPE covers a wide range of aftermarket parts, provided they are permanently installed by a dealer or third party shop. It does not cover maintenance or repairs.
III. Relationship to Other Coverages
Custom parts and equipment coverage supplements your existing collision and comprehensive auto insurance. It is important to understand how CPE interacts with these other coverages.
Collision coverage pays for damage to your vehicle from a collision with another car or object. This covers the original manufacturer parts only. CPE adds coverage for any aftermarket parts you've added.
Comprehensive coverage pays for damage to your vehicle that is not a collision - like theft, vandalism, weather, fire, or animals. Again, it only covers stock parts, while CPE adds coverage for custom parts.
CPE does not replace or fulfill your state's minimum required liability coverage. Liability coverage pays for damage you cause to others and is mandatory. CPE is an optional add-on.
Like collision and comprehensive coverage, CPE claims may be subject to your deductible. If you have a $500 deductible and make a CPE claim for $2,000 in damage, you would pay $500 and insurance would cover the remaining $1,500.
CPE also may apply separate limits or exclusions from your main policy coverages. Make sure to understand if parts are excluded or have lower limits under CPE.
Examples of how CPE interacts with other coverages:
Your car with $2,000 in aftermarket parts is totaled. Collision coverage pays the value of the stock vehicle. CPE pays the $2,000 for the custom parts.
Someone steals your car stereo covered by CPE. Comprehensive coverage would pay for the OEM stereo, while CPE pays for the upgraded stereo.
You cause an accident that damages another car. Liability coverage pays for the other car, while collision coverage pays for damage to your OEM parts. CPE covers your custom parts.
A tree branch falls and damages your custom hood and spoiler. Comprehensive coverage pays for the OEM hood, while CPE pays for the custom hood and spoiler.
As you can see, CPE works with your existing collision and comprehensive coverage to provide additional protection for aftermarket parts. It does not replace or fulfill state minimum liability coverage requirements. Contact your insurer to learn about CPE deductibles, exclusions, and limits.
Types of Parts Covered
CPE covers a wide variety of aftermarket parts and equipment added to your vehicle. Here are some of the main types of parts that would be covered:
Custom wheels and tires: Aftermarket rims, spinners, alloy wheels, racing tires, and wheel covers added after purchase are covered. This includes:
Aluminum, alloy, or magnesium custom wheels
Wheel covers like chrome, wire-spoke, or custom finishes
Special tires like oversize tires, mud terrain tires, or racing slicks
Spoilers and body modifications like hoods, body kits, fender flares, and adjustable suspension are covered.
Performance parts that upgrade the engine, drivetrain, suspension, handling and braking are covered. For example:
Engine modifications like turbochargers, superchargers, intake and exhaust
ECU/computer tuning and remapping
Custom suspensions and lowering/lifting kits
Upgraded brake systems
Interior parts like aftermarket seats, steering wheels, shift knobs, and custom upholstery added by a dealer are covered.
Any custom paint jobs, wraps, decals, stripes, or other exterior cosmetic upgrades are covered.
Permanently installed electronics like stereos, speakers, GPS systems, cameras, and entertainment systems are covered if installed post-purchase.
Anti-theft devices and alarm systems added after purchase are covered.
Other special equipment covered includes:
Running boards
Fog lights
Bed liners
Trailer hitches
Roll bars
Roof racks
Winches
Brush guards
In a nutshell, any parts that alter the function or appearance of your vehicle compared to stock and are permanently installed may be covered by CPE. Be sure to check your specific policy language for any exclusions.
Electronics Covered
Many drivers customize their vehicles with aftermarket electronics like stereos, speakers, TVs, and more. CPE can provide coverage for these types of electronics when permanently installed.
Audio equipment: Aftermarket stereos, speakers, amplifiers, and audio accessories added after purchase are covered. For example:
High-end stereos and speakers from brands like JBL, Alpine, Pioneer, etc.
Built-in amplifiers and subwoofers
Satellite radio receivers
Bluetooth adapters
TVs and video equipment: Permanently mounted TVs, DVD players, and screens added by a dealer would be covered. This includes:
Flip-down overhead DVD screens
Headrest-mounted TVs
Side/rear entertainment systems
Navigation systems: Aftermarket GPS navigation systems, mapping software, and hardware are covered.
Driver aids and sensors: Backup cameras, proximity sensors, lane departure warning systems, and other driver aids added later are covered.
Performance monitors: Gauges, heads-up displays, and data acquisition systems related to vehicle performance and added afterwards are covered.
Two-way radios: CB radios, business/commercial band radios, and ham radios installed post-purchase are covered.
Smartphone integration: Custom mounts, interfaces, and integration kits for smartphones are covered.
Note that there are limits on CPE coverage. While a $10,000 stereo system may be covered, the insurer may limit claims to $1,000-$2,000 for electronics. Verify your coverage limits. Also, homemade or improperly installed electronics may not be covered. Professional installation is recommended.
As mentioned above, CPE will be beneficial for expensive upgrades like high-end stereos, entertainment systems, navigation, and electronics integrated into your vehicle. Just be aware of policy limits and exclusions.
Other Special Equipment
In addition to parts that enhance performance and electronics, CPE also covers other special equipment permanently added to your vehicle.
Disability equipment: Wheelchair lifts, hand controls, and other modifications for disabled drivers are covered.
Van upgrades: Storage systems, beds, work benches, and customizations for vans used as campers or work vehicles are covered.
Off-road accessories: Equipment for off-roading like brush guards, skid plates, rock rails, lift kits, winches, and roof racks added afterwards is covered. For example:
Brush and bull bars to protect the front end
Skid plates protecting the underbody
Suspension lifts and leveling kits
Auxiliary lights such as light bars and off-road lights
Winches for recovery when stuck
Towing accessories: Hitches, wiring harnesses, and towing upgrades added later are covered. For example:
Receiver hitches, fifth wheel/gooseneck hitches
Trailer brake controllers
Upgraded transmission coolers
Bed addons: Bed liners, caps, racks, rails, and other truck bed customizations are covered. For example:
Spray-in or drop-in bedliners
Bed caps, toppers, tonneau covers
Side steps and bars
Interior: Custom floors, panels, gauges, and seats may be covered if added afterwards.
Exterior: Running boards, fender flares, hood shields, and upgrades added later are covered.
Safety: Backup cameras, proximity sensors, lane departure systems, and aftermarket alarm systems are covered.
As you can see, CPE covers many sorts of special equipment, from towing accessories to bed liners, disability equipment, and interior/exterior upgrades. Review your policy language and consult your insurer to verify coverage.
Dealer vs Manufacturer Parts
A key aspect of CPE is that it covers parts added by dealers and third parties, not the original manufacturer.
Parts installed by the manufacturer are covered under standard insurance. For example:
Wheels, transmission, stereo installed at the factory
Options like sunroof, leather seats, Bose audio ordered from the manufacturer
Parts added afterwards by a dealer or other party are eligible for CPE. For example:
New wheels, tires, lift kit added by dealership
Aftermarket stereo, speakers, amp added by electronics shop
Bed liner, brush guards added by truck accessory store
Some examples comparing manufacturer vs dealer/third party parts:
The manufacturer offers leather seats and a sunroof as options. These are covered by standard insurance. The dealer-installed remote start is covered by CPE.
The manufacturer offers 18" wheels. 20" custom wheels added later by the dealer would be covered by CPE.
The factory stereo and speakers are covered by regular insurance. An aftermarket stereo installed afterwards is covered by CPE.
There are a few exceptions:
Manufacturer parts ordered as accessories through dealer may be covered under standard insurance. Verify with insurer.
Dealer must be authorized if installing manufacturer accessories. Unauthorized alterations may not be covered.
CPE covers the parts added after the initial purchase, while standard insurance covers OEM parts. Verify who installed parts in question and whether CPE applies when filing a claim. Consult your insurer with any uncertainties.
Coverage Limits
CPE endorsement have limits on the amount of coverage provided. Understanding these limits is important when considering CPE.
CPE limits typically range from $1,000 to $10,000 depending on your policy and state. Higher limits may be available.
The limit caps the amount that can be claimed for custom parts under CPE. Any costs above the limit are your responsibility.
Examples of CPE limits:
Your policy has a $2,000 CPE limit. You have $3,000 worth of aftermarket parts that are damaged. CPE will cover only $2,000, leaving you to pay the remaining $1,000.
You have $15,000 in custom parts and purchase a $5,000 CPE limit. If damage occurs, your coverage maxes out at $5,000. You would owe the remaining $10,000.
Your state caps CPE at $1,000 per policy. Even if you pay for higher limits, claims over $1,000 will be denied.
Important considerations regarding CPE limits:
Limits can vary by type of part. For example, electronics may be capped lower than body kits or wheels.
Choose limits carefully based on total value of custom parts. Insufficient limits leave you underinsured.
Limits may need to be increased over time as you add more custom parts.
Deductibles still apply on top of limits. A $500 deductible on a $2,000 limit would cover only $1,500.
Exclusions may exist regardless of limits, like racing parts. Make sure parts are covered.
Adding CPE to Your Policy
If you have aftermarket parts on your vehicle, here is how you can add CPE coverage:
1. Contact your insurance provider
Call your agent or insurer's customer service.
Ask to add a CPE endorsement or rider to your existing auto policy.
2. Review options and pricing
Insurer will explain available coverage limits and pricing.
Make sure limits adequately cover total value of custom parts.
Consider any deductibles that apply.
3. Provide details on custom parts
Give insurer a complete list of aftermarket parts on your vehicle.
Note those that alter performance or functionality.
Provide any paperwork from dealers/shops who installed parts.
4. Confirm coverage
Have insurer confirm in writing which parts are covered.
Verify if any parts are limited or excluded.
Save written confirmation with your policy documents.
5. Adjust coverage as needed over time
Increase CPE limits if you add more custom parts.
Remove CPE if you remove parts or sell vehicle.
Tips for adding CPE:
Inform insurer any time parts are added to maintain coverage.
If switching insurers, make sure to get CPE on new policy.
Install parts properly to avoid denial of coverage.
Avoid hiding parts from insurer. Disclosure prevents issues later.
Read Endorsement documents carefully to understand coverage.
You must communicate all details on your custom parts to your insurer and buy appropriate CPE limits to get coverage. Adjust as needed when modifying your vehicle further.
Conclusion
In conclusion, custom parts and equipment (CPE) coverage provides important protection for aftermarket parts added to your vehicle. CPE supplements standard collision and comprehensive insurance to cover parts installed by dealers and third parties that alter the function or appearance of your vehicle. It covers everything from custom wheels and tires to electronics and performance upgrades. Just be aware of coverage limits and any exclusions that may apply. Consider adding CPE endorsement to your policy if you have invested in aftermarket parts. And adjust your limits accordingly if additional parts are installed down the road. With proper CPE coverage, you can have peace of mind knowing all permanent upgrades and customizations made to your vehicle are protected.
FAQs
Q: Is comprehensive coverage for custom parts and equipment required by law?
A: No, comprehensive coverage for custom parts and equipment is not required by law, but it can provide financial protection for your customizations.
Q: How much does comprehensive coverage for custom parts and equipment cost?
A: The cost of comprehensive coverage for custom parts and equipment can vary depending on your insurance provider and the specific terms of your policy.
Q: Can I purchase comprehensive coverage for custom parts and equipment without having comprehensive coverage for my vehicle?
A: No, you must have comprehensive coverage for your vehicle to be eligible for comprehensive coverage for custom parts and equipment.
Q: What should I do if my custom parts and equipment are damaged, lost, or stolen?
A: If your custom parts and equipment are damaged, lost, or stolen, you know your comprehensive coverage will cover the stolen pieces, so once you file the claim, your car insurer will send and ajuster who will investigate the theft. Once the adjuster finishe the investigation, your car insurer will offer you a settlement.
Q: What factors should I consider when selecting a comprehensive coverage for custom parts and equipment policy?
A: If yoi’re going to buy a comprehensive coverage for custom parts and equipment policy, you should be aware that what that policy covers and what not, the cost of the policy, and the reputation of the insurance provider in Better Business Bureau or the National Association of Insurance Commissioners.
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