How Will Car Modifications Affect your Car Insurance?

Are you someone who loves your car so much that you have multiple modifications on the vehicle? You just can’t help putting personal touch on your car. Customization and personalization are two words which power your car. From new car mats to upholstery revamping, you have it all. And you’re now looking to add even more modifications.

But before you do that, there’s news for you. All these changes or modifications are going to have an impact on your insurance premium, and a significant impact on that. It’ll even impact your getting car insurance in the first place. These shall impact how much insurance premium you have t pay per year. It is better to think about all the potential costs before changing anything.

Car insurance agencies consider modified vehicles ‘higher-risk’ vehicles. That means these present more risk than normal unmodified vehicles. Agencies also know that customizations are done primarily by the young, which means that vehicles can easily prove to be unsafe in the future. Additionally, you should also consider that the cost of modifying and replacing parts may be more than the car itself.

Which modifications affect car insurance premium?

Before we get to that, we have to know what a modified car is.

A modified car is one that has been altered, enhanced or modified for the purpose of appearance or performance enhancement. Car insurance companies classify such modifications into several categories. Here are some examples of vehicular modifications:

1. Customized paint job

2. Performance enhancement

3. Structural changes

Have you made modifications to your vehicle? If yes, it is important that you let your car insurance company be informed about the action. The company then adds an endorsement to your existing policy which requires you to pay additional premium to make up for the company’s additional risk.

What are some of the enhancements which can attract such high premiums?

1. Fog lights

2. Chrome bumpers

3. Chrome wheels and racing tires

4. Hood ornamentation

5. Spoilers at the front and back of the car

6. Accent lights under the car

7. Improved sound system

If you install any of these, and others, your insurance premium goes up. As said above, this is because your vehicle now poses a bigger risk to the insurance company. Of course, if they are giving the insurance service, they are going to select customers who are less likely to get into an accident. Those who are capable of rash driving such as younger drivers are a risky group. How to detect them? One way is to look at their car enhancements. 

What happens when you do not report your car enhancement?

You may think it's ok to enhance your car and not tell the car insurance company about the same. However, this only attracts a bigger problem: the agency shall cancel your car insurance.

Documents and premium bearing endorsements you’ll need to modify your vehicle

For additional and removal of CNG/LPG kit

You’ll need to get your policy document updated with an endorsement. The documents include your request letter, a registration certificate, report of vehicle inspection, and endorsement premium in case of addition of bi-fuel kit, and an invoice copy of the LPG/CNG kit.

Addition and removal of anti-theft system

You’ll have to get your policy updated with an endorsement, with documents like your request letter, the security system’s invoice copy, and invoice premium in case of removal.

Installation and removal of electrical accessories

The endorsement shall include/exclude the electrical devices which were installed/removed from the car after purchase. The documents include

Installation and removal of non-electrical accessories

The endorsement shall include/exclude the non-electrical devices which were installed/removed from the car after purchase. The documents include an invoice copy of the accessories, the policy holder’s request letter and the premium amount.

To Conclude

It is true that modifying your car costs a lot, but many people are choosing to do just that. General modifications won’t increase your premium largely, but some modifications may. Be aware of the costs if you are thinking of making some modifications.