Canadian Ron Shortt is a far cry from the fast and furious type: The 47-year-old Toronto man drives a 2002 Pontiac Sunfire back and forth to his job as a computer information technology specialist, and his driving record is snow-white clean—no accidents, no tickets.

None of that mattered when Shortt decided to dress up his Sunfire with off-the-shelf, bolt-on interior parts, special wheels, a trick exhaust and lowered springs. In response, his insurer of 15 years, State Farm, canceled his policy, citing the lowered springs as a big no-no.

As with muscle cars of yore, which faded away as much because of jacked-up insurance rates as the triple whammy of high gas prices, government emissions rules and safety regulations, insurance companies are embarking on a collision course with the booming population of drivers who insist on tuning their sport compact rides.

“The insurance industry may be able to accomplish what the police could never do,” says Shortt, “by making all these cars illegal to be on the streets because they can’t get coverage.” Shortt eventually wound up back with State Farm, but not before he reinstalled the factory springs and had the work verified by an insurance company adjuster.

Steve Budzinski of Ottawa also was dropped by State Farm because of performance upgrades to his Acura Integra Type-R. “My underwriter flat out told me it no longer wants to insure modified cars,” said Budzinski.

State Farm Canada spokes-man Derek Fee says the insurer has no blanket policy to refuse coverage to the sport compact segment, but he acknowledges some sport compact owners—particularly those involved in street racing—are a growing concern. “That subculture is causing difficulties for the rest,” Fee says.

In the United States, major insurers like AAA and State Farm say sport compacts aren’t a problem—at least not yet. State Farm spokeswoman Ana Compain-Romero says the company has no issues with minor upgrades such as lowered springs and tuned exhaust systems, but she recommends informing your agent about any modifications, especially when you go from minor to major. Changes discovered after the fact (say, after an accident when an owner is trying to collect against the policy) may void the coverage.

“Changes are subject to an agent taking a look and an underwriter deciding if we can extend coverage,” Compain-Romero says.

That kind of talk has some people worried Canada’s sport compact insurance woes could be a precursor of similar trouble in the United States. Steve McDonald, senior director of government affairs for the Specialty Equipment Market Association, says the aftermarket group is keeping an eye on the situation and gathering information.

“We’re not sure how widespread it is,” McDonald says. “We are alarmed by the possible implications of this.”

Meanwhile, auto manufacturers are powering ahead with plans for performance models, as well as building up their inventories of performance parts that can be used to turn their sport compact entries into tire-ripping street burners. Automakers contend they are merely responding to demand from customers who want performance.

Are they concerned about potential insurance pitfalls? “To a degree, yes,” says General Motors sport compact expert Bob Kern. “But 90 percent of kids say ‘So what?’ Most kids are dedicated to the cars and aren’t really reading the fine print. I think a lot of them don’t know they could invalidate their policies by modifying their cars.”

 

Insurance companies just want more money from us. If the big guys won's insure you the little guy will for a bunch of bucks.

Earl

 

Interesting read, but I don't know...the Canadian angle of that story has me wondering if it's particularly valid for the US. First, I can't imagine that the performance modification community in Canada is anything like as large as it is in the US. Thus, it's easier for insurance companies to push this sort of thing up there without a consumer backlash. Plus, Canadian society in general seems more prone to that sort of regulation (govt. or otherwise) than we are down here. After all, isn't Canada the place where radar detectors are illegal nationwide? For better or worse, that kind of thing would never fly here in the US.

 

I think you need to be reasonable with your mods and what your agent
should cover.

If you mod your car to do wheelies going backwards, you can't expect
your agent to cover it at the same premium.

 

You think the aftermarket would sit idly by and just watch this happen? Doubtful in the US...

M

 

i understand the insurance companies point of view, although i disagree with it - think about it.... if you add exhaust, springs, chip, etc.... 9 times out of 10 you want it for performance, which means you will drive faster (or at least your car will be faster i.e. more dangerous).... springs and new rims means your car will handle better - you will take corners faster. even if you don't, you might be that 1 guy in 10 that won't. i know i did.

but you have options. Some insurance companies are cool and will insure you either way.. my insurance company even includes the cost of all performance modifications IN the premium so if i have a theft, they pay for all my springs and pulley and everything all over again. USAA. thats where its at! ;

 

I guess I can understand their point of view a little but I don't agree with it. Some people do buy a car and put on mods to make it faster but what constitutes the insurances reason for dropping them besides they have after market, street legal, parts on their cars.

Let's say I put mods on my MCS to make it just over 200hp. Why would they drop me but would cover me if I owned a 400hp Corvette? The same can be said for these people that buy Honda's only to upgrade the suspension so it handles the curves better. They could get dropped yet us, MINI owners, with good suspensions wouldn't. The only way I believe they have the right in dropping you is if you are in a lot of accidents, have many speeding tickets or have non-street legal parts. Then again the insurance companies seem to do what they want.

I wouldn't doubt if auto manufacturers are hiding behind the insurance companies and would like for something like this to happen. I doubt if you would get dropped if you had a factory supplied JCW kit, Dodge factory parts for you Neon SRT, gmgoodwrench factoryperformance parts and so on.

 

I wonder how the insurance company would know if one's car has been modded, unless one is made to fill out some kind of declaration in the renewal form. Any thoughts on this?

 

you don't have to tell them its modded. they'd never know.

and don't forget, insurance companies can do whatever they wish. they are private organizations, not federal agencies. They, just like any business, can allow whoever they want to cover.

 

and the JCW cars have 37 Hp more than a stock MCS - you can insure THOSE!

I don't find much substance in the claim that a (large) insurance company would do this in the US.

M

 

Part of the issue is fear of the unknown. The underwriters can cope well with large pools of people, because they can collect statistics and figure out an appropriate rate to charge.

With a small group that smells of bad risk, it's tougher to write the coverage. No one at the insurance company wants to say to their boss: "Yeah, we lost a boatload of money on that foreseeable risk. You really should fire me."

No, I don't want to pay more either...

 

>>you don't have to tell them its modded. they'd never know.

Wouldn't you want them to know? If they didn't, after your car gets demolished while parked on the side of the road they won't cover all your expensive mods.

 

I'm probably going to get yelled at, but here it goes anyway. Seems the trend is "I've got more mods/HP than you". Why? I'm not sure that it's the performance mod's ability to cause an accident, as much as it is the mentality behind applying the mods in the first place. After all, you mod a car so you can show off right? Well, it's the "showing off" that's causing the accidents/risk increase, not necessarily the application of the parts. I just don't get the competition thing on the streets. If you want to race, race on a race track. I personally love seeing cars as they were engineered, delivered to the public in their original state. My opinion ONLY!!