What You Should Know About Modified Car Insurance

Anything you do to your vehicle that changes it from its manufactured specifications is modifying your car. The list of modifications you can make is nearly endless and almost always legal, but it doesn’t mean there won’t be consequences for doing it. 

Whether you modify your car to improve performance, appearance, functionality, or all three, be sure to keep your auto insurance company informed of any changes you make. Modifying your car can affect your car insurance.

Modifying your car can increase the repair costs of your car but decrease its value. Nevertheless, it costs more for you since you had to pay for the aftermarket changes. But, the modifications – and, in some cases, your whole vehicle – may be in jeopardy of going uncovered by your auto insurance if you fail to let your provider know.

Modifications impact the collision and comprehensive coverage, referred to together as full coverage, you have. Full coverage covers the many different types of damage your car can sustain, from accidents to weather-related hazards and theft.

After your car suffers damage, your insurance company uses its value to determine how much to reimburse you for repairs. Making significant changes to your vehicle through modifications affects the value.

If you’re thinking about modifying your car, you should first read through your policy to see if it covers aftermarket parts or modifications. Most won’t. This means that if you get in an accident, your insurer won’t cover the value of the customizations by default. 

For instance, let’s say you got custom, specialized rims for $1,500 during the life of your policy, but you don’t let your carrier know. After an accident, your insurer may not cover the value of those rims since they didn’t know about them. You’d be reimbursed the value of your car, not including the cost of the rims.

In worst-case scenarios, your insurance company can choose to void your policy and not reimburse you at all if they find out that you’ve purposefully misrepresented the value of your vehicle to them. Basically, if you lie to your provider, you can be at risk of serious financial trouble and find yourself uninsured.

You should discuss any significant modifications you’re thinking of making with your carrier before you do them. Your provider will advise you if making the changes affects your coverage.

It’s possible that your insurance company will agree to cover your modified car. But, your rate will likely go up. Modified car insurance is usually more costly than standard coverage because customizing your car typically makes it more expensive or more dangerous.

Modifying your car to increase performance can mean you’re traveling at higher speeds more frequently, which means you’re more prone to accidents, and accidents you can suffer may be more severe. Also, modifications may increase your car’s repair costs, which means more insurance is required to cover your vehicle. The more insurance you need, the more you’ll pay.

If you’re looking for a new auto insurance plan for a modified car, you may want to look into an agreed-upon, or replacement cost, plan. An agreed-value policy involves getting an appraiser or specialist to determine the value of your modified car. You and your provider must then agree on the value of your vehicle based on the appraiser’s decisions, and your carrier will cover it for that amount.

A replacement cost or agreed-upon value car insurance policy for your modified car is usually more costly than standard auto coverage, but it may be your best option if you’ve made major aftermarket changes.

Modifications that void car insurance vary by provider and policy, so it’s critical to speak to your insurance company before making any major changes. Purposely hiding modifications you make, or waiting until after you get into an accident to inform your provider about modifications, will complicate the claims process and possibly nullify your coverage.

Performance modifications that may void your car insurance if your provider is unaware can include:

Other modifications that may not void your policy but can raise your rate include:

Know that insurers may limit coverage of added stereos and subwoofers to a specified dollar amount. Also, if they’re not permanently attached to your car, they may not be covered under your car insurance at all. Instead, your homeowners policy may apply if they’re damaged or stolen.

Not all modifications are for performance or aesthetics. Some are for functionality. Vehicle modifications for persons with disabilities, such as wheelchair ramps, power seats, and more, may also raise rates.

By law, an insurance company can’t charge higher rates because a driver is disabled. But, many accessibility modifications increase the repair costs of your vehicle, which often results in higher premiums.

Also, it’s important to note that your insurance also won’t cover any damage resulting from modifying your car. Your carrier won’t pick up the bill if you ruin your car by installing aftermarket parts yourself.

Some insurance companies will include limited coverage for modifications in their standard policies, while others offer optional additional coverage for modifications.

When you check your policy, you may find language that your provider covers modifications up to a certain dollar amount, such as $1,000 or $5,000 for alterations that get permanently attached after your car’s original sale. If this applies to you, you can only receive this maximum after damage, even if all of your modifications cost much more.

Some providers may include coverage for modification, but they’ll charge more. For instance, Progressive, one of our auto insurance partners and one of the largest providers in the nation, offers custom parts and equipment coverage in its policies.

Custom parts and equipment coverage covers repairs to things you add to your car, like a stereo, custom wheels, or a paint job if the original manufacturer didn’t install them. For Progressive, this coverage typically has a $5,000 limit.

If you’re looking for modified car insurance quotes, we’d love to help. Clovered partners with several of the top auto insurance companies in the nation, many of which offer insurance for modified cars. Fill out our simple auto insurance quote form and indicate your modifications in the space at the bottom to get options for insuring a custom-built car.

Some vehicle modifications can actually lower your car insurance premiums, too. Adding additional safety features, like a dashcam, anti-theft devices, and airbags may offset some of the cost of other modifications you’ve made. Get in touch with one of our licensed agents for more information and a modified car insurance quote.