Car Stereo Insurance

Everyday people are having their vehicles and car stereos stolen. I'm not going to baffle you with the statistics. Just know that it could happen to you and that if you have a custom stereo system your odds are even greater for being a target. You need to protect yourself. Besides a good security system (which will be covered in another chapter) you need insurance.

There are several terms you need to know about insurance. Some of these you may be familiar with but others you may not be.

  • Premium - the cost of your insurance policy
  • Deductible - what you must pay when pay for an insurance claim. If you have a $500 deductible and your loss is $1,000 you will only be paid $500 by your insurance company. The first $500 is paid by you (your deductible) and the remaining is covered by your insurance company.
  • Collision - insurance that covers the damage to your vehicle in the event of a crash.
  • Liability - insurance that covers the damage to other vehicles (not your own) in the event of a crash.
  • Comprehensive - insurance that covers non-collision claims on your vehicle such as broken windshields, vandalism (paint scratches, etc.) and some stereo systems.
  • Rider - additional insurance coverage for items such as custom stereos, custom paint, etc. Covers items not covered by comprehensive coverage.

When shopping for insurance there are several questions you will want to ask your agent. The first question should be "what do I need to do to cover my stereo?". Most comprehensive policies will only cover stereo equipment that is installed in factory locations (drop-in speakers, head units, etc.) and only up to the cost of a replacement factory unit. If you have an amp rack and subwoofer enclosure they may not be covered by a comprehensive policy. This is where a rider would be needed. Your insurance company may have limits on the amount of the rider. If you have a $6,000 stereo and the limit on your rider is $4,000 then you're not fully covered. You may need to switch insurance companies or seek out a company that will insure just the stereo system. Another important question is replacement value and depreciation. If you paid $400 for a head unit two years ago and it is stolen, how much will you be reimbursed? Your insurance company may depreciate the cost of your head unit so that you would only receive $220 as an example. Make sure you know the policy before you sign the papers. Read the fine print and don't be afraid to ask questions. Here's a list of other important questions you'll want to ask:

  • What is the claims policy and where do you go to make a claim?
  • Who will be doing the appraisal and are they familiar with car stereo equipment?
  • Will you be able to choose the installation shop or will you have to use the shop the insurance company chooses?
  • Are CDs/tapes/radar detectors etc. covered by the policy?
  • Does the equipment have to be in factory locations?
  • Does the policy pay for custom work (fiberglass, Plexiglas, paint, etc.)?
  • If the vehicle is not drivable after a break-in will the insurance company pay to have it towed?

Make sure you document all costs associated with your stereo. Make a folder specifically for the stereo and keep all receipts. Get a letter from the installing shop, on their letterhead, detailing the cost of the system. You will also want to take before and after photos of the installation. A video camera would come in handy for giving a guided tour of the system. Be sure to explain what each piece of equipment is so it can be matched up to your records. Keep the video in a safe place and don't forget to remove the record tab.

Here's some miscellaneous safety tips that will help to keep your ride safe.

  • Get a car alarm and use it. Thieves will choose an easy target so make sure your vehicle alarm has visual deterrents such as window stickers and flashing LEDs. Your system may also get you a discount on your vehicle insurance. Ask your insurance provider.
  • Lock your doors. You wouldn't believe how many vehicles are stolen with unlocked doors. Have your security system installer wire the power door locks to activate when the alarm is armed.
  • Park in a well lit area. Again, thieves like an easy target and they hate to be seen. Park under a street lamp in a high traffic area.
  • Don't advertise your equipment. I know I wanted to have my windows plastered with all of the cool window stickers too but it's a terrible idea. These attract thieves like nothing else. You're basically broadcasting that you have expensive equipment worth stealing. They call them "steal me" stickers for a reason.
  • When mounting your equipment, use or ask your installer to use non-standard screws. For example hex-head, star-head, and square-head are bits that an average car thief may not have. If nothing else it will slow them down. I use a combination of different screw heads when mounting equipment. It's a bit of a hassle for me but it's a huge hassle for a thief.

Another little known fact is that some car alarm manufacturers will cover your deductible (with limits) if you have and use their brand of car alarm. The details vary greatly so contact the manufacturer and your local shop for details.

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