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Key Takeaways

  • Ask your insurance company if your new car is covered by your current policy or if you need to change your car insurance.
  • Your regular car insurance won't cover changes like custom wheels or a better stereo system.
  • If you have a good driving record and have made a few changes to your car, you can change your insurance by agreeing to a value ahead of time.

What is modified car insurance?

Insurance policies that cover modifications to a vehicle are known as modified car insurance. The phrase "aftermarket" refers to modifications or adaptations that don't come from the factory. Traditional insurance policies typically do not cover these changes. You can, however, ensure that you have adequate insurance coverage for all of your vehicle's components, including aftermarket ones, by taking modified car insurance.

The definition of "modification" varies from insurance company to insurance company. Car insurance policies that cover the value of your vehicle's customized parts are typically called replacement-cost policies. As a result, listing and valuing your modified parts may require the assistance of an appraiser. You and your insurance company will likely have to agree on the worth of the vehicle. When compared to a conventional policy, this sort of insurance usually provides superior coverage.

What is a modified car?

Modifications are defined as deviations from the original design intent. Most of the time, these modifications are made to improve the product's functionality, performance, or overall appearance. Modifications such as the following are frequently seen:

  • Adaptive equipment for disabilities
  • Custom paint
  • Custom wheels
  • Interior and exterior lights
  • Racing seats and harness
  • Stereo systems
  • Supercharger or turbocharger
  • Suspension upgrades
  • Winch system
  • Window tint

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What is defined as a car modification?

Aesthetic modifications

These modifications are generally done to enhance the vehicle's aesthetic appeal. An aesthetic modification is any change made to the vehicle's appearance, whether it's on the outside or inside. Aesthetic or cosmetic modification, on the other hand, is not always aimed at making a noticeable difference in appearance.

The adjustments made to the vehicle’s body can significantly impact its performance. Certain body kits, for example, improve a car's stability and aerodynamics over the stock body.

Performance modifications

The term "performance modification" refers to alterations made to a vehicle in order to improve its performance. Power, handling, and/or fuel efficiency can all benefit from performance modifications. A wide range of vehicle modifications fall under this umbrella. These include everything from engine and exhaust system upgrades to air filters and tires and suspension.

Functional modifications

A functional modification is one that alters or enhances a vehicle's performance. This includes the installation of sunroofs, air conditioning, phone, roof rack, and navigation system. Modifications that add new features to a vehicle that weren't there before are referred to as functional modifications.

Does insurance cover modified cars?

In most cases, if you modify your vehicle in order to improve its performance or appearance, you will need a special insurance policy. Custom cars typically feature high-end components and necessitate specialized service at the mechanic's shop.

In the event of an accident, the repair bill will be higher. It's also worth noting that these modifications tend to raise the value of the car that is insured. You may get a discount on your insurance if you install anti-theft devices or other safety features.

What are the types of insurance for modified cars?

In the event of an accident, you'll need one of the following types of custom car insurance to get the full value of your car and its modifications reimbursed:

Supplemental coverage

Adding an endorsement to your standard auto policy provides additional coverage. The term "custom parts and equipment coverage" is used by some insurance companies, such as Progressive. Your deductible is subtracted from the value of any aftermarket or custom features covered by the policy. Keep in mind that you'll need comprehensive and collision insurance before you can add on this extra protection.

Stated amount coverage

A total loss will result in a payout equal to the lesser of the vehicle's actual cash value (less the deductible) or the amount you claim it is worth. If you have a lot of custom parts or equipment, this coverage may make sense.

Classic car insurance

You can get classic car insurance through several different companies that specialize in evaluating and protecting collectible, exotic, or custom-built automobiles.

If you're planning to install new parts on your vehicle, it's important to notify your insurance company first. The custom elements may not be covered if you don't notify the company, and any repairs or part replacements will be at your expense.

Always decide on the value of your modified vehicle before committing to a policy price, regardless of whether you get additional insurance coverage or separate, customized auto insurance. (An appraiser typically determines the price.)

The mutually agreed upon value of the modified vehicle can be paid out if it is damaged or totaled. There will be an impact on your rates based on potential increases in vehicle value, and your insurance company can explain which enhancements are included under your current policy and whether you need to include an endorsement or purchase a separate policy.

What are the different types of car modifications?

An automobile's value is affected when it is modified by removing factory parts. It's possible that your insurance company will take into account whether or not you installed the parts yourself or had them installed by a professional.

A rearview camera or an anti-theft system, for example, will increase the safety and security of your vehicle, which will reduce claims. The following are some of the common car modifications:

  • Rims
  • Bumper
  • Custom paint
  • Running boards
  • Truck bed liner
  • Turbocharger
  • Fuel system upgrade
  • Higher or lower suspensions

Only functional changes need to be made in some cases. It is possible for people with disabilities to drive or ride in a vehicle that takes their needs into consideration thanks to these modifications. These are some of the most common modifications to mobility:

  • Amputee rings
  • Steering cuffs
  • Modified-effort steering
  • Pedal extenders
  • Left-foot accelerator
  • Push-pull hand controls
  • Floor-mounted steering
  • Wheelchair/scooter lifts and ramps
  • Siren detectors for the hearing impaired
  • Wheelchair-adjustable seats and seat belts

There are a lot of different types of modifications that insurance companies don't recognize. Your vehicle will receive the same treatment regardless of whether you've added a wheelchair ramp to a van or a performance-enhancing engine modification.

A driver's disability cannot be a reason for an insurance company to deny coverage. Insurance companies can charge more for vehicles that have been heavily modified, even if disabled drivers are not supposed to pay higher premiums because of this.

Modifications not covered by auto insurance

Many car insurance policies do not cover certain modifications. You may not be covered for non-permanently attached accessories. As an example, subwoofers that aren't screwed into the car and then stolen aren't likely to be covered because they aren't technically part of the vehicle.

Benefits of modified car insurance (Why do I need modified car insurance?)

Modified car insurance is required if you have any parts that have been altered. The following are some advantages that can be obtained from an altered auto insurance policy:

Maximum coverage for modifications and damage

If you're in an accident or your car is stolen, traditional policies don't usually cover modified parts, which can lead to expensive out-of-pocket costs.

It is also possible to keep your car insurance policy active by modifying your policy's terms. A material misrepresentation can invalidate your policy if you fail to disclose changes to it.

It is possible that you will have to pay a claim out of your own pocket as a result. Even if your car is totaled or stolen, this could imply that your insurance company will not cover the cost of a replacement vehicle.

Your policy stays protected

Your insurance policy may be void if you fail to disclose any modified components. You can also protect yourself by purchasing a modified policy.

A vehicle with modifications should only be driven if the driver has modified car insurance. Insurance companies may deny your claim if you or another driver are involved in an accident and make a claim based on your vehicle's modifications.

You can rest easy knowing your vehicle and its pricey accessories are well-protected if you have adequate modified insurance from the start.

What car modifications can lead to insurance discounts?

  • Rearview cameras
  • Anti-theft systems
  • Accident-sensor technology
  • Daytime running lamps

Even if safety tech features make you less likely to get into an accident, they don't always get you a discount. This may seem counterintuitive. You shouldn't always count on these discounts, since some high-tech safety features can actually raise your rates because the parts are expensive to replace or fix.

Will vehicle modifications raise my car insurance rates?

Most of the time, yes. The cost of your car insurance is likely to go up if you add anything to it. Most likely, your first car insurance policy was made using the manufacturer's factory standards. When figuring out how much it might cost to fix a modified car, the parts will be more unique and, often, more expensive.

Insurance companies have found that people who change their cars are more likely to file a claim. There are some clear reasons why this is the case. The first is that adding expensive equipment and changes can often make a car more likely to be stolen. Thieves may be more likely to steal cars that have been heavily changed.

Second, if you make your car go faster, you can also make it more likely that you'll get into an accident. If you put in a high-performance engine, it is assumed that you plan to use it, which means you might go faster. Same thing with bigger tires, which can actually make the car less safe.

Best insurance providers for modified car insurance

Car Insurance Company Average Annual Rates
Allstate $1,982
American Collectors $1,009
American Modern $1,486
Auto-Owners Insurance $1,452
Chubb $2,090
Farmers $1,373
Grundy $1,010
Haggerty $1,212
Nationwide $1,904
New Jersey Manufacturers $1,196
Progressive $1,774
Safeco $1,196
State Farm $1,292
USAA $1,296

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The best specialty insurance companies for modified cars

All of the specialty insurance companies in this area, including American Collectors, American Modern, Chubb, Grundy, and Hagerty may be the best option for car insurance. Insurers Grundy and Hagerty stand out with special coverage for 30 days after you add a new car to your policy.

Hagerty key features

  • Provides coverage for paint jobs that costs over $10,000
  • Covers modifications made to the car's engine, fuel system, etc.
  • Structural changes made to the car's body gets coverage.

Grundy key features

  • Covers original equipment manufacturer parts.
  • A deductible waiver if your car suffers damage beyond repair.
  • Personal property protection.
  • Coverage for daily-use vehicles.

Cheap modified car insurance: how to find it

Rates don't always go up when something changes. If you want cheap insurance for a modified car, there are some things you can add that could actually lower your rates. Most changes that could help you save money are ones that make your home safer or more secure. Among them are the following:

  • Airbags
  • Seat belts
  • Rearview cameras
  • Anti-theft devices
  • Accident sensors
  • Blindspot detectors

But before making such changes, you should always check with your insurance company first. If not, you might want to check with your car insurance company to see if they offer discounts for things like telematics, paying the full premium up front, or having a clean driving record.

Things to consider when looking for modified car insurance

Whether you're making changes to your car because you need to, to make it faster, or because you want it to look better, you should always think about how it will affect your insurance coverage.

  • Talk to your insurance company about the changes you're making, whether you're adding performance or aesthetics, or functional modification.
  • Get maximum information on your coverage and premiums.
  • Do your research and compare quotes.

Auto Insurance Data Methodology

The auto insurance rates published in this guide are based on the results of research completed by Way.com’s data team. Using a mix of public and internal data, we analyzed millions of rate averages across U.S. ZIP codes.

Quotes are typically based on a full coverage policy average unless otherwise noted within the content.

These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes will differ. Given this, it’s important to go through our insurance steps form to find how much you can save with way.com

Frequently asked questions about modified car insurance

What if I buy a car that has already been modified?

If you buy a car that has already been changed, it's important to let your insurance company know right away. Insurance companies don't just assume that a car has been changed and base their rates on the equipment that came with the car from the factory.

Before you buy such a car, you should know that your insurance company may be less likely to cover you or may even refuse to cover cars that have been changed.

What is considered a car modification?

Some of the most common modifications that may require modified car insurance include:

  • Chrome or custom rims
  • Chrome bumper
  • Larger wheels
  • Custom paint job
  • Custom interior
  • Tinted windows
  • Roof rack
  • Grill guard
  • Anti-roll bar or sway bars
  • Truck bed liner or pickup cap
  • Running boards
  • Accent lights
  • Floodlights/LED light bars
  • Spoilers
  • Wheelchair ramp and other modifications for disabilities
  • Tow bar or hitch
  • Bluetooth connectivity
  • In-vehicle Wi-Fi system
  • Custom audio and/or navigation system
  • DVD system
  • Turbocharger
  • Fuel system upgrade
  • Dual exhaust
  • Lowered or higher suspension
  • Lift kit
  • Winch

If I am in an accident, will car insurance cover my custom roof rack?

It depends, which is why you should let your insurance company know about any changes you make to your car. Or, even better, talk to your agent before you make any changes to make sure they will be covered.

Your car insurance company wants to make sure that these more expensive things are taken care of. Insurance companies see vehicles with extra upgrades as a higher risk because they are more likely to be broken into or stolen.

In some cases, they are also more likely to have an accident. For example, improving the performance of a car is usually linked to going faster. Insurance companies worry about changes to cars that are made for racing or going fast, which are both high-risk activities.

As for cosmetic or entertainment-related changes, like upgrading your car stereo, if your new high-end audio system and subwoofer are stolen or need to be replaced after an accident, they'll be more expensive than the standard stereo the car came with.

Do I need to tell my insurance company about my custom modifications?

Yes, you have to tell your car insurance company about the changes, even if it means paying a higher premium. That's because if someone files a claim against you, your car insurance company may not pay out if they find out the car was changed without their knowledge.

The insurance company will see this as lying about your coverage, and you may have to pay the claim out of your own pocket, which could cost you tens or even hundreds of thousands of dollars.

Not only does telling the insurance company about changes make sure that your claims go smoothly, but it also lets them know that when you do file a claim, you're not trying to get more than the claim is worth.

Is it illegal to turbocharge a car?

Most turbochargers and superchargers are legal as long as they don't make your car fail the emissions test or safety inspection in your state. Before making this change to your car, you should check with the DMV in your state.

Which car modifications are illegal?

Different states have different rules about how you can change your car. For example, tinted windows are against the law in some states if they are too dark or cover more than a certain percentage of your windows. In New Jersey, however, you can get a medical exemption to tint your windshield and/or front side windows.

What's the best insurance for modified cars?

Hagerty is a well-known car insurance company that covers cars that have been changed. You can get an agreed-upon value policy, which means that you and the company will agree on how much your car is worth and how much insurance you need to cover it.

How does modified car insurance work?

If you have changed anything about your car, you must tell your insurance company. Most likely, your car insurance company will add an endorsement to your policy that will cost you more money.

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Learn more by city and state for car insurance




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