Wife asked me this question the other day and I wasn't sure on how to answer it so figured I'd ask. Didn't want to call the insurer as simply asking questions can cause all sorts of stupidity to occur.

I have a 'project' Jeep that I purchased last year for $2800. It's a 1997 TJ and was worth around $4-$k at the time so got a bit of a steal on it. Insured it the day I bought it and have no issues.

Since then I've built it up and had it completely redone; completely new paint, some body work, replaced anything plastic with metal body parts, differential lockers, air compressor, new metal bumpers, Warn winch, stereo system, new wheels and 33" tires, etc. Eventually it'll get either a V8 or TDI engine.. At one point I mentioned this to the insurance people when updating some other insurance and they said it was 'non standard' equipment but asked if I had all the receipts and I did and they said they wouldn't need to adjust my coverage. All in all, with parts and labor I've put about $10k into it and plan on keeping it forever.

So the question is, lets say someone hits me and does a few $k worth of damage. Nothing major but enough to 'total' the Jeep; do they base this on the stock value? If so, I'd get totaled by them for practically anything as they wouldn't pay out 1500+ on a car worth maybe $5k. Or do they then add in all of the non-standard stuff then as well?

Secondly, if I got hit with say $2k worth of damage and they want to total it, yet I want to keep it and have my friend who owns a bodyshop repair it, how does that work? Is there some sort of payout and then I buy it back for cheaper?

Try Midwest Classic Insurance.  They specialize in kit cars and collectibles.

These would be questions to ask your insurance company. No way anyone here knows what your policy covers.

BOHICA

What you put into it has very little to do with market value.

You need to find insurance for the vehicle that is based upon the Agreed Value.



With collector cars you basically tell the insurance agency how much it would cost to replace the vehicle like for like, and that value is what your premium is based upon and in the event of an accident, they will pay you up to the Agreed Value minus the deductible.

This is the correct answer.

I know some companies will cover mods, but the amount and type vary.  For example, I believe USAA calls it "custom equipment" and will cover up to 5k somehow.

If you do stated value or agreed upon value.....make sure you read the company's provisions on such coverage. Many carries will insure at stated value ask for receipt , appraisals and what have you but have stipulations in the policy that state they will pay the lesser value of the vehicle (based on current appraisal, valuation at loss etc). Be sure you read everything and if you don't see it in print ask for it.

Typical disclaimer: state laws may vary and this is only my experience

I can't help you much as far as being certain all the extras are covered but my brother had a similar incident that I will describe to help you understand how the buy-back process goes...

My brother had a newer, somewhat expensive truck $20-30k that he had added ~$8k in add-ons (different wheels, AL flat-bed, fuel tank, tool-boxes, custom bumper etc.

He totaled it by driving through a garage. Frame/suspension was junk (concrete stub-wall), most of the front body work was damaged, but the back half was good (where most of his add-ons were). Insurance totaled it, payout was a bit over blue-book value which came up just a little bit shy of paying for what he had in the truck.

Considering all the add-ons were good and the engine (Cummins diesel) and transmission were good, and the truck had the premium interior, he decided to buy it back. He had to pay 18% of vehicle value which is fixed at that percent no matter what (that's either state law or the ins. co. policy, I can't recall which but I want to say it is state-law). So for 18% of the value he bought the truck back, took his $8k in upgrades off, removed several of the nice features of the premium interior so that he could install them in his replacement truck, sold the axles to a guy that was going to repair them, and sold the truck carcass with engine/transmission. All-in-all, after he was done removing upgrades he sold what was left of the truck for MORE than it cost him to buy it back. IE, with the insurance check (minus 18%), keeping his upgrades, and selling what was left, he GOT PAID to have an accident...

YMMV but I'm going to assume that this isn't the only occurrence of insurance buy-back value being "fixed" no matter what the real value or actual damages are...