Car insurance may sometimes seem like a mystery. Your premium is determined based on a variety of factors, including: the type of car you drive, your personal driving record and where you live.
As one of the most important factors is the type of car you drive, it should come as no surprise that your insurance company is quite interested if you modify your car. So, it’s very important to contact your broker or your insurance company before you make any modifications to your vehicle. If you’ve made a modification to your car without consulting with a broker or informing your insurance company, it’s possible that these modifications will impact your insurance policy and you may actually be driving uninsured.
The Pros and Cons of Modifying Your Car
Customizing a car is an alluring prospect for anyone who wants to stand out in the crowd. Modifications can range from esthetic changes such as body kits, to performance enhancers such as turbochargers. When expertly handled, some modifications can enhance the performance and market value of the vehicle.
Even when carried out by experts, performance modifications may void the warranty of your engine and could land you into legal trouble. Some mods, such as nitrous injection kits, are illegal in Canada. In some provinces, officers can pull a modified vehicle off the road if they doubt its roadworthiness and safety. If they do, they will ask for a certificate of inspection covering the modification.
Mods can also cause malfunctions in the vehicle and damage parts, which can ruin your vehicle or cause an accident. Based on the nature of the ‘cons’, there may either be no vehicle insurance coverage or premiums may be very high. If the modifications are done without your insurance company’s knowledge, it may be considered a violation of the policy conditions and any claims you make may be denied.
Before having any customizations done to your vehicle, think hard about what you stand to gain and lose, and have a discussion with your insurance broker.
Why vehicle modifications affect insurance
There are two key reasons why modifying your vehicle can impact your auto insurance:
- It can affect the safety and performance of your car
- It can affect the overall value of your vehicle
When applying for insurance, you are required to provide the details about your vehicle's make and model. This information helps the insurance company determine your coverage price.
Any modifications will affect the insurance company’s appraisal of your vehicle, which can affect your insurance policy.
In some cases, the effect might be to increase your insurance premiums, but in the worst-case scenario, it could mean termination of your insurance policy.
Modifications impacting vehicle safety
If you plan to make any modifications to your vehicle to change how it performs, it’s vital to contact your insurance broker beforehand to understand how this could affect your policy.
Changes that might impact performance and safety include:
- Modifications to the engine
- Modifications to the vehicle’s suspension
- Modifications to the brakes or braking system
- Modifications to the vehicle’s transmission
- Increasing or decreasing the tire size
- Tinting the windows
Modifications such as lowering the suspension and altering the size and/or power of the engine are considered to increase the risk of the vehicle being in an accident. Most of the modifications listed will require you to seek a new insurance policy with an insurance company that is willing to insure a modified vehicle – hence the need to speak with your insurance broker.
Modifications impacting the vehicle’s value
Unless explicitly stated in the policy, most standard auto insurance policies either do not cover aftermarket parts, or they only offer minor coverage for certain aftermarket modifications. This means that if you want to add a feature to your vehicle to increase its value -- such as an expensive aftermarket stereo, special exhaust system; custom paint job or fancy rims -- these additions may not be covered under your insurance policy and in some cases, they may even void your insurance policy.
If you’re planning to modify your car with aftermarket parts and want them to be covered, you may need to look for a new policy. Contact your insurance broker to discuss the details and find out what coverage is available for vehicles with the types of modifications you want to make.
Always notify your insurance broker about modifications
When modifying your vehicle or purchasing a modified vehicle, it’s imperative that you inform your insurance broker and the insurance company about the modifications.
This is a responsibility placed entirely on you; it’s not the duty of the insurance company to inquire about or investigate modifications.
If you are in an accident in your vehicle and later it is determined by the insurance company that your vehicle was modified and you failed to inform them, your insurance claim could be denied and your policy could be revoked, leaving you liable for the damages and the cost of the accident.
For customized vehicles with extensive modifications, it may be necessary to look for an insurance company that offers specialized insurance coverage for modified vehicles, as standard insurance coverage will not cover the vehicle.
Want to know more about vehicle modifications?
If your car is your pride and joy and you want to make her even prettier than she already is, that’s wonderful - just make sure you will still have the right coverage in place in the event of an accident.
A BrokerLink broker can help! Before you make any changes to your vehicle, give us a call. We’ll help you figure out what you can do and how it will affect your insurance so you can drive with peace of mind, knowing you and your car have the protection you need.
Get an auto insurance quote [phone]
Can Modifying My Vehicle Affect My Insurance FAQs
Are modified cars more expensive to insure?
In most cases, yes, but it depends on the modifications and the insurance company. Many insurance companies will not cover any aftermarket parts but you may be able to find coverage through specialized insurance companies. Before making any aftermarket additions or changes to your vehicles, contact an insurance broker to learn more about getting a modified car insurance policy.
What types of modifications are likely to increase car insurance premiums?
There are many, for example, lowering the suspension or altering the size and power of the engine generally increase the risks of a car accident. So, these are types of modifications that are most likely to escalate your insurance premiums.
What happens if you get into an accident with a modified car?
If you are in a car accident and the insurance company finds out that you modified your vehicle without informing them after the fact, your claim could be denied and your insurance policy could be cancelled, leaving you liable for the damages and cost of the accident.