Have you ever thought about splurging on a set of new alloy wheels, installing a high-end sound system, or giving your car a custom paint job? Modifying your vehicle can be a great way to personalise it and improve its performance.
However, you might want to check with your insurer before making these changes. Not all modifications are viewed favourably by insurance companies or state and territory transport departments. Some modifications might hike up your policy premium, and some can void your existing policy.
Even the slightest of modifications can alter the cost of your premium significantly, so you should make yourself aware of the details of modified car insurance.
Changing the appearance or making adjustments to improve the performance of your vehicle is considered a modification. Insurers generally consider these changes to be modifications:
- Custom paint jobs
- Tinted windows
- Neon lights
- Roll bars
- Higher performance brakes
- New exhaust system
- High-performance stereo
- Alloy wheels
- Wider tyres
- Sport seats
- Suspension upgrades
- Turbochargers or superchargers
If, however, any of these come standard in your car, the insurer won’t consider it a modification. You should still declare them on your car insurance policy to make sure they are covered.
How does modification affect my car insurance?
Insurance companies take into account two key areas while evaluating your insurance costs – the risk of an accident and the risk of theft. Modifications that change the performance of your car can be deemed dangerous and increases the risk of an accident. At the same time, changing the look and making the car more attractive increases the likelihood of possible car theft. Both of these possible scenarios can significantly increase your insurance premiums.
If you already have car insurance, it is advisable to check with the insurer regarding all your planned changes before you modify your car. Checking with them will give you a clearer picture of whether your current policy covers the modifications, or if you’ll need to modify or add to the policy to cover the changes.
Generally, you’re more likely to get a more affordable insurance quote if the modifications are done by a professional than if you were to carry out the modifications yourself.
What changes does modified car insurance cover?
Not all car insurance providers accept all modifications, and the actual list varies from insurer to insurer. Typical modifications that most insurers cover include:
- Alloy wheels
- Chrome exhaust systems
- Leather seats
- Bicycle racks
- Roof racks
- Driving lights
- Stabiliser bars
- Reversing cameras
- Tow bars
- Air shock absorbers
- Alarm systems
- Radio and stereo systems
- CD stackers
- Additional lighting
- Single-tone air horns
Modifications that are not covered by most insurers include:
- Custom paint work
- Deafening exhaust systems
- Nitro or hydrogen fuel equipped engines
- Roll bars or roll cages
- Racing harnesses
- Turbo or supercharged engines
- Dark window tinting
- Noncompliant changes to the tyres
- Illegal changes to the suspension
- Illegal alterations to the chassis
- Nonstandard and unlawful changes to the engine
There are some specialist modified car insurance providers who are willing to insure vehicles with performance-enhancing modifications. They do this by adding to the excess you pay, which is the amount you pay when you make a claim.
You can compare modified car insurance providers to find the right insurance for your car.
Is it possible to get low-cost car insurance for modified cars?
Like with any insurance policy, there are several ways to lower your modified car insurance premiums. The following list will show you how to insure a modified car at a low cost.
- Driving a low-priced and less powerful car
- Registering additional drivers, which may get you a discount
- Having a cap on the age and number of drivers
- Installing a car alarm or immobiliser to increase security
- Bundling all your insurances with one provider to access a loyalty discount
- Choosing a Pay As You Drive option
- Looking for a policy where you can access a ‘No Claims Bonus’ discount
- Purchasing insurance online to get a discount
- Instead of agreed value modified car insurance opt for market value modified car insurance
Other insurance conditions to keep in mind before modifying your car
You might still have a few queries regarding modified car insurance. Here are some common conditions around insurance for modified cars.
1. Is my modification legal?
All modifications made to your car must be street-legal for you even to entertain the idea of insuring the car. If you modify your vehicle in a way that isn’t legal, you’ll likely not be able to get insurance to cover your car. The police could also fine you, impound your vehicle or deregister it if you get pulled over with illegal modifications. Young drivers with a probationary licence aren’t permitted to drive cars with performance-enhancing modifications and could lose their licence.
2. Does my modification need approval?
Depending on the state or territory you live in, you might need to seek official approval before carrying out certain complex modifications. Check with the local transport department for details.
3. Does my insurer need to know about modifications made to my car?
If you don't inform your insurer about any car modifications, you may not be fully covered. They may also reject your claims and even cancel your policy because the car no longer matches the one on your policy. If your vehicle is still under warranty and you don't inform the insurer, it could invalidate your warranty.
4. Should I opt for a modified car agreed value or market value?
Some insurers might give you the option to choose between market value and agreed value when deciding on your cover. Market value means your policy will cover you for the current market value of your car, subject to depreciation. Agreed value is the number you and your insurer agree your car is worth, but the premiums, in this case, can sometimes be higher. If you’ve modified your car significantly, the market value may not match the additional value you’ve added to the car. In this case, opting for the agreed value may be the smarter option.