How Will Car Modifications Affect My Car Insurance Premium?

The desire to tinker with and modify motor vehicles has been around nearly as long as the motor vehicle itself. Car modifications have been steadily on the rise since the 1960s, and have only grown more diverse and sophisticated in the intervening decades.

There are any number of reasons why enthusiasts modify their cars. Aesthetic improvement is likely the most common reason — but there are also modifications to improve performance, increase the longevity of the car, fine-tune it to specialized use, or make it more accessible to drivers or passengers with specific needs. There are also “restomods,” in which older vehicles are restored and modified simultaneously.

But there’s one change modification enthusiasts might not be aware of — the change modding might incur on the car’s insurance rates. Even a slight modification might have a significant effect on what you pay for your car insurance.

Which Modifications Affect Car Insurance Rates?

Some modifications are more likely to change your insurance rates than others — and some may even require specialized insurance before you can take your vehicle on the road. For insurance purposes, a modification is any change made to a vehicle that makes it look or perform differently. This may or may not include manufacturer add-on modifications, which are treated differently than non-standard modifications done by a third party.

Here are a few of the most common modifications and why they might affect your insurance premiums.

• Engine modifications (especially non-standard modifications). Modifications that increase the speed and acceleration of the vehicle are considered at a higher risk of accidents. Mods like superchargers can add significant increases to your insurance premiums. 
• Brakes and suspension. As with engine modifications, these change a critical aspect of the car’s performance and would require an assessment by the insurance company. 
• Wheel modifications. Even though an average wheel modification would only change the look of a car and not impact performance, it still might have an effect on your insurance premiums. (We’ll get into the reasons why a little further on.) 
• Body and paintwork. As with wheel modifications, a new paint job or eye-catching bodywork, particularly if it’s especially colorful or ostentatious, can impact your insurance premiums. Even if it seems utterly superficial, it pays to inform your insurer of the change. Even car stickers or decals might change your insurance rates! 
• Interior changes. Making interior changes to your vehicle such as brake pedals, modified steering wheels, sound system, seats, or other aesthetic changes could also affect your insurance. 

Why Do Car Modifications Increase Insurance Rates?

Now that we’ve got a handle on which modifications can affect your insurance premiums, let’s talk a little bit about why. There are a few main reasons:

• Increased risk of accident. Any modification that increases or changes the performance of your vehicle (engines, brakes, suspension, even spoilers and even seats) is considered a higher accident risk. Motorists with these modifications are considered more likely to be driving at higher speeds and taking more risks on the road — thus the impact on insurance premiums. 
• Increased risk of theft. For modifications that don’t change the performance of the vehicle, but instead enhance the aesthetic appeal of the car (paint and bodywork, decals, etc.), there’s the increased risk of theft. A good-looking car with some expensive modifications might prove a more tempting target for thieves, thereby making more of a risk for insurers. 

Do I Have to Inform My Insurer of Modifications?

Almost any modification is going to have an impact on your car insurance rates. However, not every modification will adversely affect your car insurance rates, depending on your car insurance provider. For example, safety devices like parking sensors won’t cause your rates to go up, since they actually increase the safety of the vehicle.

Regardless of the nature of your car’s modifications, you should always make sure to declare those modifications to your insurer. The insurer must be able to make an accurate assessment of your car’s risk in order to give you a fair and reasonable premium.

While you’re not legally required to disclose those modifications to your insurance company, it’s still important you do so anyway. Why? Because if your insurer doesn’t know about those modifications and you suffer an accident or theft, your coverage could be declared void, and any claim you make is likely to be rejected.

And this could not only mean a huge hassle for you when attempting to process an insurance claim, but could also create even bigger challenges for you down the line, as having your insurance rejected or canceled could make it more difficult for you to get car insurance in the future.

If you’re going to go to the expense of modifying your car, it’s best to make sure you’re not financially out of luck should something bad happen.