Car makeovers make it hard to insure

Car makeovers make it hard to insure

Whether it’s souped up suspension or a wild sub-woofer, giving your car a radical makeover could make it hard to insure. Chris Walker reports.

February 8, 2010

Two key factors play an important role in determining the cost of car insurance – the risk that the vehicle could be involved in a collision, and the likelihood of theft. Vehicle modifications that add to the possibility of either happening will raise your insurance premiums.

Some modifications like tow bars are unlikely to affect the cost of cover. Others can even result in lower premiums, alarm systems being the obvious example. But there are plenty of modifications that can be a case of makeover madness, and paying more for car cover could be the least of your worries.

In late 2009 for instance, new laws were introduced in New South Wales that require engineering approval for height-altering suspension modifications. In justifying the new requirement, Minister for Roads Michael Daley said, “Hoons may think their car looks cool, but as far as I’m concerned anything more than a 5 centimetre change in a car’s suspension is dangerous and doesn’t belong on our roads.”

Comments like these underpin the need for careful scrutiny before modifying a vehicle. Your state’s motor vehicle registry can provide information on modifications that will prevent a car getting through registration. Be aware too, even seemingly harmless modifications could void your vehicle’s warranty, so be sure to check the paperwork before completing the bodyworks.

Even if the works on a car are legal, modifications that increase a vehicle’s appeal to thieves or boost its speed and power are likely to lead to higher premiums. Increasing a car’s engine size, turbo-charging, installing an expensive sound system or adding a set of mag wheels are all modifications that can become significantly more costly once you add in the effect of higher premiums.

Just how much extra you’ll pay in premiums depends on the insurer and the work involved. You may even find that none of the large car insurance companies are willing to offer cover. This is why it is imperative to compare cover online.

The key is to compare quotes before completing any modifications, or prior to buying a vehicle with non-standard fittings. Most importantly, be upfront with an insurer about any alterations or accessories when you take out a policy. Failing to mention any non-standard features could mean they’re not covered if you make a claim. At worst an insurer may void your policy altogether if it turns out that the modifications contribute to an accident.

 

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Learn more about car insurance

Does insurance cover a stolen car if keys were in the car?

A car insurance policy that covers the theft of your car, such as third party fire and theft insurance, usually covers a stolen car, even if the keys were in the car’s ignition.

However, your insurer may deny the claim if you live in an area where there have been several car robberies reported recently. They will see you leaving the keys in the car as a case of negligence. In such cases, your insurance provider may even expect you to have installed anti-theft security measures in your car. 

You may need to confirm whether or not you left your keys in your car, and if they had been stolen or misplaced, before filing your car insurance claim. The loss or theft of your car keys may be covered by a comprehensive car insurance policy, but usually as an optional item.

If you can confirm that your car keys were stolen, mention this in your claim as this will help establish that your car was not stolen as a result of your negligence.

Can you insure your car for 6 months?

Most Australian insurers won’t offer you a 6-month car insurance policy, so you may need to buy a policy that covers your car for damages and cancel it after six months. You will need to purchase comprehensive car insurance to protect your car from accidental damage, theft, vandalism, or natural disasters.. 

Consider checking whether your 6-month comprehensive car insurance will cost more if you pay monthly or six-monthly premiums instead of a one-time annual premium. Another question to ask the insurer is whether you’ll need to pay administration or cancellation fees when you cancel the policy.

Alternatively, you can look for a suitable ‘pay as you drive’ car insurance policy, which usually offers you the coverage of a comprehensive car insurance policy but only requires you to pay for the distance driven. Such a policy may not be the ideal 6-month car insurance plan as it is based on how much you drive rather than for how long. If you need to drive a lot, you may end up paying more than you’d pay for regular car insurance.