We spend a lot of time in our vehicles, and car modifications can be a way to make them safer, more comfortable or just more fun. From custom rims to adaptive equipment that supports individuals with disabilities, there are many reasons why you might modify your car. Insurance companies often have restrictions on modifications, also known as customizations, that change your vehicle’s performance. Since these changes are made after-market, the value and cost of these parts are not accounted for, and you may want to consider adding modification coverage to your policy.
What is a modified car?
A modified car is one that is altered, whether aesthetically or by installing parts, to adjust the car’s performance or to add extra safety features. Some common car modifications include:
- 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
Even if you own your own vehicle, some modifications can void your manufacturer’s warranty, be illegal in your state or against your insurance company’s underwriting guidelines. You may want to check with your insurance agent and local department of motor vehicles before paying for modifications that:
- Change your vehicle’s performance
- Boost your vehicle’s speed
- Dramatically raise or lower your vehicle’s suspension
- Lowers your chance of meeting your state’s emissions requirements
- Use nitrous oxide
- Enhance exhaust noise
- Affect your car’s level of safety
- Reduce visibility of your car or the road
What is modified car insurance?
A typical car insurance policy with comprehensive and collision coverage, often referred to as full coverage, covers physical damage to your vehicle if it is involved in an accident. However, this coverage may not include modifications or customizations.
Some insurance companies offer specified coverage for customization or modification at an additional cost. If you’re involved in an accident and don’t have coverage for the mods, you’ll only be covered up to the original manufacturer version of the car. This could be a substantial loss if your modified parts are also damaged in the accident.
Will insurance companies cover modified cars?
Some traditional insurance companies offer modification coverage on a regular car insurance policy, but some don’t. You may be able to get a classic car policy with companies like AAA or State Farm, but not all cars qualify. Mods also have to be permanently installed in the vehicle to be covered under a standard car insurance policy.
There are also specialized car insurance providers who offer coverage for sports cars, hot rods, classics and other modified vehicles, with limitations. Companies like American Modern, Grundy and Hagerty may offer coverage with modifications if your original insurer won’t cover your modifications.
Do I have to tell my insurer about my car modifications?
When adding a vehicle to an insurance policy or requesting quotes, insurers may ask if your vehicle has been modified or customized in any way. Not disclosing mods made to your car may be construed as material misrepresentation.
If you are modifying a vehicle you are already insuring, you might not be required to notify the insurance company, but it may be in your best interest to do so. Comprehensive and collision coverage usually only applies to after-market parts if the policy has a modification endorsem*nt. Without the endorsem*nt, you will likely only receive compensation for the original manufacturer’s version of the car following a covered claim.
When seeking extra coverage for mods, you’ll likely need to provide receipts and proof that you purchased the items and that they were installed on your vehicle, including pictures of these items installed properly.
Even for vehicles with liability-only coverage, it may be important to contact your insurance provider. Even if you don’t have physical coverage for your own vehicle, mods may affect your coverage eligibility with certain carriers.
How much does modified car insurance cost?
The cost of modified car insurance varies depending on how much coverage you need and the types of modifications completed. Since you are asking the insurance company to cover more in the event of a loss, you might end up paying more for car insurance. However, if your modifications improve your vehicle’s safety, you might not experience a higher rate. Depending on the modifications done, the insurance company may also consider insuring the car to be a higher risk, which may also increase the cost of your car insurance.
Agreed value policy
Some companies offer an agreed value policy to cover car mods, which may be the best choice for modified car insurance. An agreed value policy states the value of your car including all modifications, which both you and the insurance company agree to. If you are involved in a covered accident, the insurance company will pay up to the agreed value to repair or replace your car.
Some agreed value or specialty car insurers will also offer coverage for restorations and spare parts. These optional coverage types typically cost more but may provide even better financial protection while your car is being restored or if you have spare parts or specialty tools to work on it.
Can I get discounts for car modifications?
Although insurers may not charge higher insurance rates for modifications that improve your vehicle’s safety features, like dash cams, you probably won’t find discounts for these modifications.
After making updates to your vehicle, it is understandable that you may want to look for ways to save money on your car insurance. Taking advantage of discounts or lowering your insurable risk as a driver may help you find cheap coverage. Some other discounts you may want to look for include:
- Telematics discounts: Many carriers offer telematics programs that could reward you with a lower rate for demonstrating safe driving habits.
- Student discounts: Students may be able to save on their premiums with potential discounts for good grades or enrolling in a defensive driving course.
- Payment discounts: These savings opportunities may be some of the easiest to earn. You might lower your rates by paying your premium in full or enrolling in paperless or automatic billing.
Frequently asked questions
Though you won’t have to go through the effort and expense of modifying the car yourself, you will likely still want to notify your insurance company about any modifications. If you don’t have receipts and want them to be covered, you may be able to take pictures and detail serial numbers or other identifying factors to submit to your insurance company.
Removing the manufacturer emblems and badges from your vehicle it’s still technically a modification, though this type of mod is unlikely to affect your car insurance rates. Speaking with your insurance agent may help you determine how debadging may impact your premium.
Yes, even if the roof rack comes from the dealer with the car, it counts as a modification. If it’s included in the MSRP, it likely won’t affect your car insurance premium. If you added it on after purchase, you may want to let your insurance provider know so they can determine if you need extra coverage.
