Insurance Coverage for Modified Cars

Some drivers enjoy customizing their cars to reflect their personal style, either aesthetically or mechanically. However, such modifications often necessitate adjustments to auto insurance policies or obtaining different coverage altogether. Neglecting to do so may result in inadequate coverage for the additional investments made in the vehicle, and insurers could potentially reject a claim, arguing that the vehicle differs significantly from their knowledge of it, particularly in cases involving engine, wheel size, or suspension enhancements.

Typically, any alterations made to a vehicle after it leaves the factory are considered modifications. Minor changes generally don’t raise much concern and are usually accepted by most insurance providers. Nevertheless, certain insurers may be reluctant to cover a vehicle if the modifications are excessive. Examples of popular upgrades include custom paint jobs, suspension modifications, wheel enhancements, chrome accessories, internal additions like stereo systems, and engine modifications. These alterations can be expensive and can substantially alter the appearance and performance characteristics of the vehicle.

Car insurers may reject a claim if they determine that the modifications were the primary cause of the accident. Therefore, it is crucial to disclose all modifications made to the vehicle to ensure transparency, accurate coverage and rating.

Is it easy to find insurance for modified cars?

Finding insurance for modified cars can vary in terms of ease, but it is important to address this matter with agents or providers to avoid potential issues. While some individuals may be concerned about increased premiums, they should consider the potential consequences of not disclosing materially significant information, which could result in a claim being denied. Insurers may argue that they should have been informed about modifications.

Many vehicle insurers have experience dealing with street rods, lowriders, or tuners and can accurately assess their pricing. However, the rates are likely to increase depending on the extent of modifications, the value of the car, and how they affect its performance. It is advisable for motorists, especially those undertaking their first customization project, to discuss their planned modifications with their agent in advance. This allows for clarity on how the adjustments may impact coverage and any potential changes to premiums.

Here are the possible insurance coverage options for a modified car;

  1. Custom parts and equipment endorsement on an existing or a standard auto insurance policy is an option when the changes don’t worry providers as much. This is probably the cheapest option and still allows motorists to list the changes they made so that their automobiles are repaired the way it was before the damage or additional works are taken into account when the actual cash value of the automobile is calculated in cases of total loss. Motorists may be required to submit the receipts for the works and they are advised to keep them in case.
  2. Auto insured on agreed valuation basis. It may be necessary that the car is appraised by a specialist and valuation is agreed and noted on the policy when the works are substantial and increase the vehicle’s open market valuation. This is usually the case when there is artistic paint work or the whole car has been upgraded significantly with special parts and equipment.
  3.  Custom car insurance policy may be required when the changes on the automobile are too much for a regular policy and especially increase the performance significantly. In such cases, motorists may need to find specialist insurers. Perhaps they may need to talk to classic car insurance providers because they are experienced in providing coverage for vehicles with hard to find original parts. Otherwise, they may need to talk to brokers specialising in high performance auto insurance.

Comprehensive and Collision coverage is required before motorists can add custom parts endorsement to policies. The same applies to agreed valuation. And they are normally required to inform their insurers of material modifications even if they have Liability only auto insurance coverage because risks and premiums change when you power up your car.

A good example is installing a powerful engine to an otherwise modest car. This is likely to cause a serious problem if the insurer don’t know about it. A faster auto means more chance of causing accidents and higher risk. Other examples include ram bars, which can also cause more damages to third party autos. Whatever work is carried out, it is safer to arrange proper coverage even if it means paying a little bit more premium, rather than taking chances.

Here are a few other points to keep in mind before starting an auto modification project;

  1. You should discuss your plans with the agent or talk to them hypothetically before going ahead with it. They can point you in the right direction and prevent you from making your automobile hard to insure. Perhaps, a slight change in the original plans can still get you what you want and keep the premiums low.
  2. You need to find a reputable garage to carry the works out. This is also essential for safety. You don’t want shady mechanics doing a shoddy job on a vehicle that will carry you and the family.
  3. You need to make sure that it is inspected by the right authorities and approved road-wordy. This is essential after serious work.
  4. Also, it is always advisable to keep invoices and inspection certificates just in case you may need to show them in the future to prove the value of the improvements.
  5. Perhaps it is best to coincide the adjustments with the renewal, just in case the current insurer doesn’t like it and you need to find replacement coverage. Switching is easier at the end of a policy term with no hassle with cancellations.

It is also possible that vehicle owners can actually get lower car insurance rates after installing things like alarms, rearview cameras, parking sensors or GPS tracking devices. However, any discounts may be eroded by the fact that companies may have to pay more for repairs because these extras cost money to replace. As a general rule, going over the top with these works is likely to increase premiums accordingly.