I spent $12,000 swapping a Honda K24 engine into my $5,000 Mazda Miata. It’s a track weapon now. But when I asked my insurance agent about coverage, he said, “The Blue Book on a 1995 Miata is $4,200. That’s the most we pay.” I was paying to insure a car that would financially ruin me if it was totaled.
Key Takeaways
- The VIN Dictates Value: To an insurer, the car is what the VIN says it is (a 1.8L Miata). They do not know about the K-swap unless you endorse it.
- Receipts vs. Market Value: You can’t just add $12k in receipts to the $5k car value. You need to insure the finished value of the vehicle.
- The “Modified Vehicle” Endorsement: Standard carriers might let you add $5,000 in parts. For a major swap, you need a specialist.
- Labor is $0: Unless you have an Agreed Value policy, your 100 hours of garage time are worth $0.
The “Why” (The Trap): Actual Cash Value (ACV)
The policy pays the ACV of the base vehicle.
Modifications are considered “preference items.” The insurer argues that a K-swapped Miata appeals to a tiny market, and might actually be harder to sell than a stock one. Therefore, they don’t add value for the swap; they might even deduct value for “non-factory equipment.”
[IMAGE: Spreadsheet showing “Engine Cost: $800, Mounts: $500, ECU: $1,200, Labor: $0”]
The Investigation: I Called Them
I quoted a K-swapped Miata.
1. American Modern (AMIG)
- Product: “Modern Classic” with modification endorsement.
- Result: They allowed me to list the engine swap. They required receipts.
- Payout: They cover the parts cost on top of the car value.
2. Hagerty
- Product: “Modified” policy.
- Result: We agreed on a value of $18,000 for the whole car.
- Pros: If it’s totaled, I get $18k. I don’t have to argue about the price of engine mounts.
3. Progressive
- Product: Standard Auto.
- Result: Capped CPE (Custom Parts) at $1,000 unless I paid a huge surcharge.
- Verdict: Useless for swapped cars.
Comparison Table
| Feature | Standard Policy | Parts Rider (CPE) | Agreed Value Policy |
| Engine Value | $0 (Stock) | Receipt Cost (Depreciated) | Full Market Value |
| Labor Coverage | None | None | Included in Total Value |
| Total Loss Payout | ~$4,500 | ~$9,500 | $18,000 |
Step-by-Step Action Plan
- Build a “Build Sheet”: List every part and its cost. Scan the receipts.
- Get Comparable Sales: Find three Bring-a-Trailer auctions of K-swapped Miatas selling for
15k−15k−20k. This proves the market value exists. - Switch to Agreed Value: Do not stay with a standard carrier. Call Hagerty/Grundy/Heacock. Send them the build sheet and the comps.
- Update After Tuning: If you add a turbo later, update the value.
FAQ Section
Does the swap make it illegal to insure?
Only if it voids emissions compliance in your state (like California). If it’s registered legally, it’s insurable.
What if the engine blows up?
Not covered. That is “Mechanical Breakdown.” Insurance covers the car if it crashes or burns, not if the rod knocks.
Can I keep the engine if the car is totaled?
Yes, if you buy back the salvage. Ask for “Salvage Retention” rights.