I have a 1969 Mustang Fastback completely disassembled in my garage. It’s a shell, an engine on a stand, and 20 boxes of parts. I thought my Homeowners insurance covered it as “contents.” I was wrong. When the garage flooded, the Homeowners adjuster said, “We exclude motor vehicle parts.” My Auto insurer said, “That’s not a car; it’s parts.” I was uninsured.
Key Takeaways
- The Homeowners Gap: HO-3 policies strictly exclude “motor vehicles and their parts.” Your pile of parts is worth $0 to them.
- “Restoration” Policy: You need a specific auto policy coded for “Restoration” or “Parts Only.”
- Inventory is Key: You can’t just say “I had parts.” You need a spreadsheet of every fender, bolt, and gauge.
- Value Increases: As you assemble the car, the value rises. You must update the coverage quarterly.
The “Why” (The Trap): Definition of a Vehicle
Auto insurers usually require a vehicle to be “assembled and capable of moving.”
Home insurers exclude anything “for use with a vehicle.”
A project car falls into the “Dead Storage” void. You need a specialty product that recognizes a VIN-tagged shell + Parts = A Vehicle.
[IMAGE: Photo of a car shell on a rotisserie and boxes of parts labeled “Interior,” “Engine,” “Trim”]
The Investigation: I Called Them
I tried to insure a disassembled car.
1. Hagerty
- Product: “Vehicle Under Restoration.”
- Coverage: Covers the shell and the parts.
- Requirement: Photos of the work area and a target completion date.
- Verdict: The industry standard.
2. American Modern
- Product: “Spare Parts” coverage.
- Coverage: You can schedule the shell as a vehicle and buy a high limit ($10k+) for “Spare Parts.”
- Verdict: Good, but requires careful structuring of limits.
3. State Farm
- Product: Liability (suspended) + Comprehensive.
- Risk: They might cancel if they see photos of a non-drivable car. They hate “projects.”
Comparison Table
| Status | Homeowners Policy | Standard Auto | Specialist Restoration Policy |
| Loose Parts | Excluded | Excluded | Covered |
| Shell/Body | Excluded | Covered (maybe) | Covered |
| Value Basis | N/A | ACV (Scrap value) | Agreed Value (Project value) |
Step-by-Step Action Plan
- Get a Restoration Policy: Call a specialist (Hagerty/Grundy) and ask for “Restoration” status. It is cheap because there is no liability/road risk.
- Increase Value with Progress: When the paint job is done ($10k cost), call and raise the value by $10k.
- Secure the Parts: Theft of loose parts is easier than theft of a car. Ensure the garage is alarmed.
- Don’t Let it Lapse: Even if it sits for 5 years, keep the insurance. If the house burns down, you want to be paid for the project.
FAQ Section
Can I drive it to the paint shop?
No. Restoration policies usually exclude road use. You must trailer it.
Does it cover tools?
No. Tools are covered by Homeowners insurance. Parts are covered by Auto insurance.
What if I abandon the project?
You can sell the project. The insurance ends when you sign over the title/bill of sale.