If you’re on this site, chances are you love your car, and you like to make some modifications here and there.
People choose to modify their car for any number of reasons. Sports car owners want to increase performance and improve handling, while luxury car owners may make aesthetic changes.
Classic car owners might be restoring their car to its original glory while making some improvements along the way, and even minivan owners may need to make modifications to accommodate disabilities or convert it into a camper van.
The options for aftermarket car modifications are endless, but you might hit a snag when it comes to purchasing car insurance to cover those changes. In this guide, we’ll walk you through what you should know about finding insurance coverage for your modified car.
What Is A Modified Car?
A modified car is a vehicle that has any changes from the original factory build. These could be as simple as installing a car alarm or as major as a custom paint job.
Some of the more common car modifications include:
- Stereo systems
- Suspension lift kits, lowering springs, or coilovers
- Anti-roll or sway bars
- Aftermarket wheels (especially those with different wheel offset)
- Tinted windows
- Engine mods as simple as cold air intakes, to complex camshaft upgrades and turbo kits
- Exterior paint jobs
- Tow bars or hitches
- Custom body kits
- DVD players
- Interior modifications like aftermarket seats, short shifters and steering wheels
- Exterior flood lights or LED light boards
- Wheelchair ramps and lifts
- Disability-modified steering and control systems
- Blindspot detectors
Why Do Modified Cars Need Specific Insurance?
In most states, a minimum amount of auto insurance is required to operate and drive on the road. The auto insurance company will pay for any damages you are liable for if you cause an accident or injure someone.
It will also step in financially to cover the costs if your car is damaged, destroyed, or stolen. However, auto insurance policies are put together using the car’s original factory specifications – not the cost of any aftermarket modifications.
Do Insurers Care if Your Vehicle is Modified?
Yes, absolutely! Modified cars need special car insurance to cover those changes, or you will not be compensated for damages in the event of a theft or auto accident.
If the insurer doesn’t know about your wider rims and lowered suspension system, then they will not pay for the cost of them if they become damaged.
Even more worrisome, if they claim your modifications caused the accident, it can mean a lack of coverage both for your car and any other vehicles involved.
So, if you have modified your car, it’s best to call around for some quotes to purchase modified car insurance.
When To Notify Your Auto Insurance Company
Your car insurance company needs to be aware of all modifications, preferably before they are made.
Even changes as seemingly harmless as tinted windows can be grounds for your insurance company to limit your coverage.
By withholding knowledge of any changes from the insurer, you run the risk of voiding the insurance policy altogether. This would land the entire cost of an at-fault accident in your lap.
How Do Modifications Affect Insurance Premiums?
Adding modifications to your car will affect your car insurance. Modifying a car will typically increase the monthly premium payment for multiple reasons:
- The purchase cost of most changes is often high, sometimes thousands or tens of thousands of dollars over the car’s original market cost. The insurance company will have to pay more to repair or reimburse you for damages or theft.
- Insurance companies have recorded a trend of a higher amount of claims filed by owners of modified vehicles. Sports cars and luxury vehicles with modifications are a prime target for break-ins and theft.
- If the modifications to a car serve to enhance the car’s performance, insurance companies can only assume that you intend to utilize those enhanced capabilities. A high-performance engine reflects a likelihood that the vehicle will be driven at high speeds, for example, increasing the chance of accidents.
Distinctions Between Modifications
Most car insurers do not make policy distinctions between performance or aesthetic modifications and accessibility modifications. Whether it’s adding a spoiler or adding a wheelchair ramp, both are lumped together.
Drivers with disabilities are not supposed to pay higher car insurance premiums, but they may run into this issue if the insurance sees that their van is heavily modified.
Can Any Modifications Reduce Premiums?
Some modifications can actually reduce your monthly car insurance premiums. These are modifications that deal primarily with safety or security.
In the view of the insurer, adding these to your car will reduce the likelihood that you’ll be needing to make a claim in future, and they’ll have to pay anything at all. These modifications can include:
- Seat belts
- Anti-theft sensors and alarm systems
- Rearview cameras
- Parking sensors
Are There Different Types of Modified Car Insurance?
Few car insurance policies cover modifications as a standard part of the plan, but many will cover modifications in some way for an increased premium.
Allstate, for example, have insurance coverage for modifications made to classic cars that are over 25 years old. Esurance and Progressive will provide supplemental insurance coverage up to $4000.
There are car insurance companies that specialize in heavily-modified, classic cars or custom cars, such as Hagerty or Grundy. These companies offer “agreed value policies”, since many of these cars are driven sparingly and used for shows, and therefore don’t depreciate like typical cars.
These policies have notably expensive premiums, but you will be paid a previously agreed-upon amount if the car is deemed at a total loss.
This way, there are no disputes or surprises over the vehicle value because it is the vehicle value you agreed upon. This option requires a bit of work to underwrite, as you have to prove that your car is worth a certain amount or the value of your car. You’ll need to provide receipts for all modifications and upgrades, multiple photos, and a professional appraisal or certificate of valuation.