Quick answer

Sometimes, but not by default. First-party policies usually need a Custom Parts & Equipment (CPE) add-on to cover your aftermarket parts; some carriers include only a small amount by default. If another driver is at fault, their property-damage liability should pay for your property loss (valued at actual cash value), but fights often arise over proof, parts used, and what was permanently installed. See CPE details from Policygenius and valuation basics from Kelley Blue Book (KBB). 

How coverage works (by scenario)

1) You’re making a claim on 

your

 policy (you caused the crash or no other party to pursue)

• Collision pays to fix your car; Comprehensive covers non-crash perils. Mods usually require a CPE endorsement to be paid beyond minimal limits; many carriers cap standard coverage for custom gear unless you buy extra. (Examples and limits overview: Policygenius.) 
• Rental while you’re down: That’s rental reimbursement (aka “loss of use” on first-party policies)—an optional add-on with daily/total caps, per the Insurance Information Institute (III) and NerdWallet guides. 

2) Someone 

hits you

 (third-party claim)

• Their liability coverage is designed to pay your property damage (your car as equipped) up to policy limits; NAIC explains liability vs. property coverage basics. Actual recovery still turns on proof of permanent installation and value of your mods. 
• Parts used in repairs: Insurers commonly specify aftermarket (non-OEM) parts; III notes generic parts/DRP issues, and Edmunds explains why shops/owners sometimes insist on OEM. If you want OEM coverage, look for an OEM parts endorsement or be prepared to pay the difference. 

3) Your car is a 

total loss

• Payouts use Actual Cash Value (ACV)—your car’s current market worth at the time of loss (not replacement cost). KBB and Bankrate break down ACV and how to negotiate it. Receipts + photos of your mods can help show options and market comps. 
• Heavily modified or collector builds? Consider agreed value policies (often via specialty carriers), so the mods’ value is established before a loss. (Overview: Policygenius.) 

Will they cover 

diminished value

 on a modded car?

Diminished value (DV) is the resale hit your car takes even after quality repairs. It’s real, and KBB outlines what DV is and how it’s estimated; Edmunds has long noted DV as a factor after major repairs. Whether DV is payable depends on state law and claim type (many states allow DV against the at-fault driver; first-party DV is often excluded). 

What about 

loss of use

 if the other driver is at fault?

Two different ideas get mixed up:

• First-party “rental reimbursement” (optional add-on): helps pay for a rental when your own policy responds. (III / NerdWallet explain.) 
• Third-party “loss of use” damages (claim against the at-fault driver): many states recognize it, but rules vary (e.g., whether you must actually rent a car). Industry guidance from CLM Magazine flags that state law differs. Keep receipts and a record of downtime. 

OEM vs. aftermarket parts: why this matters for modded vehicles

• Insurers frequently allow or prefer aftermarket parts in estimates; see III’s generic parts FAQ. Edmunds notes when OEM may be safer (fit, crashworthiness) and how aftermarket can affect value. If OEM matters to you, ask about an OEM endorsement up front. 

Do mods void your 

warranty

 (and does that affect claims)?

Consumer Reports explains that aftermarket parts don’t void an auto warranty by themselves; the manufacturer has to show the mod caused the problem. That’s useful when adjusters question whether a part failure is mod-related. 

What the Insurance Information Institute & NAIC say (fine print that matters)

• NAIC: Policies don’t cover equipment that isn’t permanently installed (e.g., portable stereos/phones), and you should confirm add-ons/endorsements for what you want covered. Translation: bolted-on, documented mods fare better than loose accessories. 
• III: Learn how insurers and repair networks work (DRP/generic parts) so you can push for the repair approach you want (and understand when you may owe the difference). 

Exactly what to do (so your mods actually get paid)

1. Document the build. Photograph each mod before and after the crash; keep receipts, invoices, and part numbers (wheels/tires, suspension, ECU, audio, aero, lighting).
2. Check your declarations page for CPE / custom equipment limits (and OEM parts endorsements). If they’re missing, talk to your agent about adding them now, not after a loss. (Overview: Policygenius; CPE exists across many carriers.) 
3. Ask the adjuster to include all permanently installed mods in the estimate and in the ACV if totaled. (ACV primers: KBB, Bankrate.) 
4. Decide on parts strategy: OEM vs. aftermarket. Review III’s FAQ and Edmunds guidance and price the OEM endorsement if you care how the car is repaired. 
5. Handle downtime:
   • Your policy: See if rental reimbursement is on it. (III/NerdWallet.) 
   • At-fault driver: Track days out of service; ask for loss of use. Rules vary by state (CLM). 
6. Consider agreed-value coverage if your car is heavily modified or a show build (Policygenius). 

Need help pushing back on an adjuster—or building proof for your mods, DV, or loss of use? We represent clients in Chatsworth, Woodland Hills, Porter Ranch, Simi Valley, and Los Angeles. Start here: Car Accident in Chatsworth.

FAQs

Will the at-fault driver’s insurer pay for my aftermarket parts?

Often yes, up to policy limits—if you can prove the parts were permanently installed and on the car at the time of loss. Expect debates about ACV and aftermarket vs. OEM parts used in repairs. (See NAIC on equipment coverage; III/Edmunds on parts.) 

Do I need to tell my insurer about mods?

Yes. Failing to disclose can leave mods uncovered on your own policy and complicates claims. Ask about CPE and OEM endorsements. (Policygenius; NerdWallet coverage types.) 

What proof gets mods paid?

Receipts, install invoices, photos (pre-loss), part numbers/brand, and appraisal for high-value builds. Use those to support ACV or repair estimates (KBB/Bankrate). 

Can I claim diminished value on a modded car?

In many states you can claim DV against the at-fault driver. Use market guides and documentation to quantify it. (KBB DV overview.) 

OEM parts only—can I insist?

Policies often allow aftermarket parts. You may need an OEM endorsement or to pay the difference. (III generic parts; Edmunds fit/safety notes.)