How Do Modifications Change The Rate That You Pay For Car Insurance?


Have you ever thought of customizing your car as per your style? Or loved the latest Fast and Furious movie or the suspension upgrades? Or even the sport seats or wanted to equip your car with robust alloy wheels? Have you ever thought about tuning up the engine or adding some stylish headlights?
If you are fond of cars, you definitely may be aware of the temptations of modifications from a minor change to revamping your car with some significant alterations. Some modifications are simply to change the appearance of the car but others enhance its performance. They are harmless and enthusiasts love personalizing their cars. Here are some insights about various modifications and their effect on insurance premiums and policies.

Car Modification

When you modify your car from its original condition (as sold by the manufacturer) by making some changes to it, whether aesthetic or performance improving, it is called car modification. It simply means anything that makes your car look or perform differently. These may look spectacular but the insurance premiums do not. Insurance companies generally do not provide any coverage for enhancements, exceptions being tires and rims. Hence it is advisable to consider the potential costs that will be borne by you when you modify your car.
Modifications also includes the optional or add-ons that your car dealer offers you. While paying for it, you do not realize that this means modifying your new car which leads to the car insurance being voided at the time of claim for a mishap. But the good news is that such modifications made by the manufacturers are pre-approved from the market and go with the specifications of the car.

Modifications That Affect Your Car Insurance

Suspension Enhancers or Hydraulics
Added Chrome
Alterations In Breaks
Non Standard Engine Change
Car Stickers
Mechanical Alterations
Custom Spoilers, Louvers, Scoops Or Grilles
Electronic Equipments Like Stereos
Paint Jobs, Graphics Or Murals
Functional Modifications
Custom Tires Or Wheels
Speed Enhancers
Auxiliary Lights
Engine And Mechanics Modifications
Car Interior
Structural Changes

Modifications That Do Not Affect Your Car Insurance

Modifications that are likely to decrease the risks related to accidents and thefts are generally not counted as these come handy for the greater good. For example, parking sensors protect the car from the damage that may occur while reverse parking. Whether or not a modification will be included in your policy or not is wholly based on the views of your insurer or insurance company. And they are the ones who will decide the extent of the coverage of the policy.

How Modifications Affect Your Car Insurance
More or less, all modifications have an effect on your insurance and also increase the premiums payable. They lead to higher risks which make the insurers cautious. After evaluating some risk factors, the insurance companies quote the final price. They analyze the impact of modifications on the car in order to calculate the premium. Modifications lead to consideration of new elements before finalizing the policy. Insurers assess two risk components. They are:
1. Thefts (due to aesthetic changes)
2. Accidents (due to structural and mechanical changes)


Why You Should Disclose Your Car Modifications?

You must always tell your insurer about the modifications or it might lead to invalidating the policy. Insurers have different views on which modifications will be included or excluded from the policy. So, you need to understand the terms and conditions beforehand otherwise you might end up paying way more premiums or worse, penalties. In case of any modifications, the insurers are needed to re calculate your policy premiums, thus making full disclosure of the facts essential. If your insurance company is not informed about the modifications in advance, it may undermine your policy. If you are buying a second hand car and not sure about its modifications, it is advisable to get the car examined by a mechanic.
It might increase the costs but not disclosing the changes may be considered deceitful and can impose problems at the time of the claim. If you do not declare the alterations, your application for claim may be rejected, no matter whether it was intentional or not.

Things Related To Insurance That Must Be Considered Before Modifying Your Car

1. Know your existing car policy and what it excludes and covers.
2. Consult your insurer about the changes you plan to make.
3. Make sure everything is clear to you before you spend your money.
4. Run numbers to save some money.
5. Draw comparisons as each insurer has a different view.
6. Furnish proper receipts so that you get reimbursed accordingly in a loss settlement.
7. Don’t hide any customizations from your insurer.
8. Ponder costs carefully.

The Bottom Line

More people opt for modifications despite the cost involved, whether in modifying itself or for its insurance coverage and premiums payable. It is highly crucial that you inform your insurer about such modifications. You have the freedom to modify your car provided that you act lawfully and remain aware of the costs and risks involved. It is advisable not to wait till the last moment or hide the facts or any other information from your insurance provider. This will only save you from unnecessary hassles and delays at the time of processing your claim. Also, keep in mind that you are responsible not only for your own safety but also of others, while making any structural or mechanical alterations.


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