Insuring Your System : Protecting Your System and Yourself

You can do everything possible to protect your system — install a security system, install components so that they’re hard to remove, keep a low profile — but sometimes the worst happens: Someone breaks in and steals your car audio thunder. After the shock and disappointment of losing your car audio system, you may be in for another shock by finding out that your car insurance won’t cover your loss.

The basics parts of an insurance policy include

Premium: This is the amount you pay the insurance company for coverage.

Deductible: This is the amount you pay out of pocket when you have a I claim or loss. A typical deductible is $500, which means if you have a $5,000 claim, you pay $500 and the insurance company pays $4,500. You can sometimes opt for a lower deductible by paying a higher premium.

Collision coverage: This covers the damage that occurs to your vehicle 1 from a collision. 

Liability: This covers damage to other vehicles, property, and people in the event of a crash. Almost every state requires liability insurance as a condition of licensing a driver, and some require that you carry proof of liability insurance while driving.

Comprehensive: This covers damage not related to a crash but incidents such as vandalism and theft (but not always for an aftermarket audio system) or damages caused by a natural disaster.

Riders: This is add-on coverage and is usually taken out by people who have items added to their cars that are not included under normal coverage, such as high-end car audio systems and custom wheels and paint jobs. Of course, you pay extra for a rider on top of the regular premium.

How much you pay in premiums depends on the type and amount of coverage you carry. Some people only carry liability as a bare-bones coverage, and they have to pay out-of-pocket to repair their own vehicle if it’s involved in an accident or gets damaged.

The cost of insurance is based on many factors: your age, where you live, your driving record, and what kind of car you drive. Liability coverage is charged on a sliding scale. For example, if you want to increase coverage from, say, $100,000 in property damage to $200,000, you’re going to pay a higher premium.

Most comprehensive insurance policies cover car audio equipment, but usually only if it’s installed in factory locations. So a head unit and speakers would be covered, but not amplifiers and subwoofers. There also may be limits on how much you’ll be compensated for the equipment. Each policy is different and each claim is handled differently, so it’s important to know before a theft how your insurance company handles things.

Be prepared

The best way to be prepared for a theft is to work closely with your insurance agent. Find out if she has worked with people who have had their car audio equipment stolen, and if they have not, ask if someone else in the office has. Also find out how much of your system is covered — and not covered — by your policy, and what you need to do to extend your coverage if it’s inadequate.

Chances are you’ll have to purchase a separate rider to cover your system if it’s extensive and custom-installed. But insurance companies sometimes place limits on riders and how much risk they’ll willing to assume. If you have a modest system, this may not be a problem. But if you’ve sunk tens of thousands of dollars into a system, you may find an insurance company reluctant to offer coverage even under a rider. In this case, you should shop around for another insurance company that may be willing to offer a rider that covers more extensive systems.

You’ll also want to know how much your equipment will be depreciated. An insurance company probably won’t reimburse the full price you paid for the equipment because it will have depreciated, and therefore be worth less. For example, a set of speakers you paid $200 for three year ago may only be worth $75 today. Find out how the insurance company handles depreciation and how it decides the value of the equipment.

Custom installation work is another potential problem area because an insurance company probably won’t be familiar with what it takes to install a custom car audio system and the costs involved. Ask your agent how custom work is covered.

You’ll want to answer as many of these questions as possible before a theft occurs so that there are no unpleasant surprises when the worst happens. Here are some other questions you’ll want to ask your insurance agent:

• What is the procedure for making a claim? 
• How long does it take to process a claim? 
• Are items such as CDs and iPods covered under the policy? 
• Can i choose the car audio shop where the repair work is done?

In addition, having your car towed if it’s not drivable may be covered by your policy, or you may have to pay extra for it. Find out beforehand. The same goes for renting a car until yours is repaired; find out if it’s part of your coverage or an out-of-pocket expense.

Before and after a theft

Although you hope a theft never happens to you, you can take proactive steps before or after to help minimize the hassle of getting your claim processed and getting reimbursed for the loss, as well as avoid other disappointments.

Before a theft

• Keep all your receipts for equipment purchases and installation expenses in one folder. That way, you can document exactly what you spent on the system.
• Take pictures or a video of your system so that you have a record of what it consists of and where everything was installed. Make sure to update the pictures as you make changes to the system.

After a theft

• Contact the police and file a report of the theft. Many times, an insurance company requires a police report before initiating a claim.
• Contact your insurance agent and initiate a claim. Provide the agent with detailed information, including receipts and photographs, if necessary.
• If your vehicle is involved in an accident and it has to be towed, find out where and how the car will be stored. The last thing you want is for a thief to have access to your damaged car in a wrecking yard. Ask that the vehicle be stored inside or in a secured area. Also find out when and if you’ll be allowed to salvage the car audio components from the car.