Should the improvements I put into my car be included in the value paid by insurance company?

UPDATED: Sep 30, 2022

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Should the improvements I put into my car be included in the value paid by insurance company?

We paid nearly $30,000 in improvements in this vehicle, including an upgraded transmission and other motor work. Insurance company is offering book value of the vehicle only.

Asked on January 10, 2017 under Accident Law, Montana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

They should pay the then-current value of the car including improvements, which (due to depreciation, etc.) will be less than the cost to make those improvements, but will still increase the car's value over baseline book. Not all work is an "improvement": repairs, even if necessary, are not. And idiosyncratic "improvements" which you like but which would not make the car sell for more to most people (e.g. since most people do NOT like tinted windows, there is a good chance that tinted windows would not add value.) Only things which would increase the sale price of the car were you to buy it with those improvements are things which should (subject again to depreciation) increase what you receive. You'd also have to document not just the initial cost but what they value add now would be. If they adamantly refuse to compensate you for improvements which added value, your recourse, if you think they are short changing you, would be to sue for "breach of contract" (an insurance policy is a contract) and prove in court that under the terms of your policy, they are offering less for your car than it was in fact worth.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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