New Tech for Cars and Underinsurance

Vehicle tracking devices; super sound systems; satellite navigation systems, Mp3 players and mobile DVD players are just some of the new technologies available today to spruce-up your car and enhance your driving experience.

But do you know how adding these new technologies to you car can affect your insurance?

If not, you should.

This is advice from Dial Direct Insurance’s spokesperson, Bradley Du Chenne.

“With car insurance, the level of cover and your premium is based on a number of things including the make, model and age of the vehicle; its replacement value; whether it has an alarm system and tracking device and, various other factors such as the type and value of the sound system that is installed. "

“For an insurance company to compensate you for any aftermarket or customised parts, it would need to know that those special items were on or in the vehicle. If not, there will be a mismatch between the level of premiums being paid and the replacement value of what is being insured.

“This is called under-insurance and what it means is that you will only being paid out for standard factory replacements if any of your customised fittings or accessories are damaged or stolen.

“Avoiding under-insurance is as simple as reviewing and updating your car insurance once a year and whenever you make changes to your vehicle,” he explains.

According to Du Chenne, insurance cover for aftermarket parts and accessories varies from one insurance company to the next. Some will cover certain modifications and technologies while others won’t. The impact on the cost of the insurance when cover for vehicle modifications is added also varies from insurer to insurer.

“Modifications, such as engine upgrades or a new expensive sound system, can sometimes mean higher premiums. Check with your insurance company before making any modifications, as it could mean forfeiting your low cost insurance.

“At the same time, certain modifications like a state-of-the-art alarm system, smash-and-grab safety film or tracking device can actually result in lower insurance premiums. So, it is in your interests to talk to your insurance company when you modify or add new technologies to your car because it can affect your cover and your premium,” says Du Chenne.

He concludes saying that car-owners must be aware of what can and cannot be covered by their vehicle insurance.

“Check with your insurer and confirm what they will and won’t cover under vehicle insurance. Certain items such as laptops, iPods, mobile DVD players and cameras for instance cannot be insured under vehicle insurance. If you regularly travel with laptops and other items of value in your car, make sure that you have included those items under the Portable Possessions section of your home contents insurance.”