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Do modifications increase car insurance rates?

  • Auto Insurance
  • Renee Martin
  • 5 minutes

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Modifying a car allows you to stamp your personality onto your vehicle. However, modifications can also increase your car insurance rates. Here’s how.

Think modified cars and the first thing that pops into mind might be West Coast Customs.  Over the years, the Burbank-based custom repair shop has churned out some of the most outrageous and luxurious vehicles for well-heeled car lovers.

Modifying your car not only gives you chance to stamp your personality onto your vehicle but also helps make it faster and safer. However, modifications come with their fair share of pitfalls, such as impacting the reliability of your car and even increasing your car insurance rates.

How to get insurance for car modifications

To insure the parts on your car that have been modified, you will require modified car insurance. Modified car insurance is a type of insurance that covers car modifications. Modifications or customizations, often known as aftermarket components, are extra elements that do not come from the factory. 

Read: All you need to know about track day car insurance

The majority of standard insurance policies do not cover these modifications. However, by modifying your insurance policy, you may ensure that you have adequate coverage for your car, including aftermarket parts.

Insurance companies define car modifications differently. Modified car insurance is often a replacement-cost policy, which means it will cover the cost of the modified parts on your vehicle. This implies you may need to hire an appraiser to help you list and value your customized parts. 

You and your insurance will almost certainly need to agree on the value of the vehicle. While this sort of policy may be more expensive than a conventional policy, it usually provides superior coverage.

Do car modifications affect my insurance rates?

Typically, yes. Anything you add to your car insurance policy will almost certainly raise your premium. Your initial auto insurance coverage was most likely set together in accordance with the manufacturer’s factory guidelines. The potential repair expenses for a modified car will be more since the parts are more unique and, quite often, more expensive.

According to insurance companies, drivers who make modifications to their vehicles are more likely to file a claim. This is due to a number of obvious reasons. The first is that the installation of expensive equipment and upgrades frequently increases the possibility of theft. Thieves may find cars that stand out more appealing than humdrum city runabouts.

Second, improving the performance of your vehicle increases the likelihood of an accident. If you install a high-performance engine, car insurance companies can assume that you intend to use it to its full potential. This implies you may travel at higher speeds. The same may be said about larger tires, which can potentially impact safety.

Read: Classic car insurance: It costs less than you think!

Types of car modifications that won’t affect your insurance rate

Almost all types of car modifications can impact your insurance rates. A vastly improved car, for example, may significantly boost its value. Alternatively, a shinier, more attractive car is more likely to be broken into or stolen. Furthermore, if you significantly improve the car’s power and performance, most insurance would consider the vehicle to be a higher accident risk.

Certain changes, however, will not affect your quote if they are expected to reduce the risk of an accident. We don’t consider tow bars or parking sensors to be modifications because a car with a tow bar is likely to be driven at a reduced speed for a portion of the time, and reversing with parking sensors reduces the likelihood of a crash.

Winter tires are one type of car modification that has caused a stir in recent years. We’ve heard cases where some insurers increased premiums or even refused coverage to drivers who installed winter tires. However, this shouldn’t be the case any longer.

Read: Winter driving tips: Safety checklist

There are several modifications you can make that may result in lowering your premiums. Modifications that could help you save money are usually those that increase the safety or security of your car.

Installing airbags, seat belts, rearview mirror cameras, anti-theft gadgets, crash and blind spot detectors can help make your car safer and reduce your insurance rates.

However, before making such changes, it’s usually a good idea to check with your insurance company. Otherwise, check to see whether your auto insurance carrier gives other discounts for things like telematics, paying the premium ahead, or maintaining a clean driving record.

Common customizations that will increase your insurance rates

Most types of car modifications will increase your insurance rates. The following is a list of modifications that can increase your premiums.

  • Custom paint, murals, designs, or decals
  • Electronics such as a custom stereo, PC, or TV
  • Custom tires, wheels, and spinners 
  • Custom spoilers, louvers, scoops, and grilles.
  • Turbochargers, blowers, and strokers
  • Winches or anti-roll/anti-sway bars
  • Added chrome
  • Auxiliary lighting
  • Suspension lifts and hydraulics

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