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8 minute read Published on Jul 4, 2025 by BrokerLink Communications
Car wraps are becoming increasingly popular amongst motorists and car enthusiasts. If you're looking to spruce up your vehicle's exterior but don't want to pay for a new paint job, you may want to consider investing in a car wrap. But before moving ahead with your vinyl car wrap, you need to consider how this modification impacts your car insurance. Stick around for more info.
Vehicle wrapping involves covering a car with a specific film that can modify the colour or provide extra protection to the vehicle's paint job beneath. But that's not all. Beyond changing the aesthetic appearance of your vehicle, wraps can do the following:
So, does modifying a vehicle affect insurance? Generally, any modification that alters the performance of your vehicle should be reported to your insurance company. However, in this case, you will also want to notify your car insurance provider that you have a wrapped vehicle.
Vehicle wraps can be expensive. Because of this, your wrapped car could increase in value, which would need to be recorded by your insurance provider in case you are in a car accident, so that you can be fairly compensated for your losses. At the same time, wrapped vehicles can become a target of vehicle theft, given that vinyl car wraps are highly sought after. Again, without the proper car insurance in place, you could be at risk of being undercompensated when filing a claim or your claim could be denied entirely.
Similarly, modifying a vehicle for accessibility can also increase your insurance premiums and must be reported to your insurance provider, given that your car's resale value will have increased.
Vehicle wraps provide car owners with a unique opportunity to customize the appearance of their vehicles. Whether it be for business purposes, adding a protective layer, or changing the aesthetics of your car, your options really are endless when it comes to choosing a design or specific "paint" colour.
Contrary to what you may have been told, the colour of paint or vinyl wrap won't affect your insurance premiums. So, whether you choose a matte black vinyl wrap, bright pink, or emerald green, what you pay for your insurance policy will not be impacted. Just remember that because your vehicle wrap is increasing the value of your vehicle, having a vinyl wrap, regardless, can increase your costs.
Wrapping a car is a complex process that involves access to original equipment like heat guns, special cutting equipment, and more. While it's possible that you could learn how to wrap a vehicle yourself because you're likely investing a large sum of money into the project, it may be a better idea to partner with a professional body shop. That way, you can ensure that the job is being done correctly.
While wrapping a car offers numerous benefits, there are some potential downsides that you need to be aware of, including:
While modifications like car wraps are legal, there are some changes you can't make to your car. Common illegal modifications include:
If you want to make any changes to your car to improve its performance, we recommend speaking with your insurer beforehand, as it can have significant impacts on your coverage premiums. These changes include:
Regardless of whether you drive a vehicle with a car wrap or not, you'll need to protect your ride from various hazards on and off the road with the right car insurance. It's also the law. However, depending on the province or territory you live in, the types of policies and coverage limits required will vary:
Liability car insurance is a mandatory policy in all provinces and territories. The minimum coverage requirements will vary across Canada. The purpose of this coverage is to protect policyholders in the event they get into a collision that causes bodily injuries or property damage to a third party. Should a lawsuit be filed against them, this insurance coverage will cover the cost of repairs, replacements, medical expenses, legal costs, and more up to your policy limits.
Accident benefits coverage is mandatory in all provinces except Newfoundland. This insurance coverage covers policyholders if they are in a collision that causes injuries to themselves, their passengers, or pedestrians, regardless of who is at fault. This car policy compensates for medical expenses, rehabilitation costs, lost wages, and other associated costs.
Uninsured automobile insurance is the final mandatory policy required by all Canadian drivers. This policy offers protection to motorists if they are in a collision with an at-fault driver who is either uninsured or underinsured. Protection is also offered should policyholders be hit by a hit-and-run driver.
Beyond mandatory policies, when you insure your wrapped car, you do have the option of adding additional coverages to your plan for added peace of mind:
Collision car coverage will cover the cost of repairing or replacing your wrapped car if it is damaged in an at-fault collision. Note that when filing an insurance claim, you will need to pay a deductible to your insurance provider before they will cover the remaining expenses.
Comprehensive car coverage also covers repairs and replacements of your vehicle. However, unlike collision, it covers you if your car is damaged in a non-collision incident. For example, common perils covered under this insurance include theft, vandalism, severe weather, falling objects, and fire damage. Again, you'll need to pay a deductible to your provider before the remaining costs are covered.
One final type of optional car insurance coverage popular among Canadian drivers is accident forgiveness. Accident forgiveness is additional coverage that can be added to your car insurance policy as an endorsement, to protect your driving record and to help prevent your insurance premium from increasing if you have an at-fault accident claim.
Note: coverage varies by province.
So, what other factors beyond your car affect insurance rates? When it's time to renew expired car insurance, your provider will consider several factors to determine your risk profile as a customer. Typically, an insurance agent will consider the following:
With this information, your insurer will either raise or decrease your rates for the next year.
While having a vehicle wrap will play a role in your insurance rates, there are ways you can save on your coverage even after you notify your provider that you have a wrapped vehicle. Here's what to consider:
If you have other types of insurance, you may be able to bundle your policies with your provider. Typically, companies offer a bit of a discount when you have more than one coverage option with them.
While a car wrap will increase your premium, consider making other changes to your vehicle that make it safer to operate. For example, adding security and dash cameras or even winter tires can help bring your premiums down. Additionally, there may be other discounts available that you qualify for based on your driving profile. So, make sure to ask your insurance agent or broker whether you qualify for any savings.
Before purchasing coverage, make sure to shop around and compare quotes from different insurance companies. Doing so can help you weigh your options and find a plan that works for your specific needs and budget.
If you're able to do so, consider purchasing your auto insurance upfront rather than monthly. Insurers tack on monthly fees because it costs them money to process your monthly payments. Therefore, to avoid these fees, consider paying for your coverage with a lump sum.
Lastly, you may want to consider increasing your deductible. A deductible is the amount you pay when filing a claim before your insurance provider will cover the remaining costs. For example, if you damage your car wrap by scraping your car door on a metal pole, you could file a claim under your comprehensive insurance to have the wrap replaced by your provider.
By increasing your deductible, you're essentially taking on more of a financial obligation in the event a claim is filed. And in turn, your provider may lower your insurance rates slightly.
Is your car insurance almost expired? At BrokerLink, we help Canadians find affordable insurance coverage. With access to multiple auto insurance policies, our brokers can help customize your coverage to your needs and budget. We can also help answer your questions about renewing car insurance with vehicle wrap modifications, and potentially help you qualify for discounts on coverage for cheaper rates!
And, if you're in the market for a new or used vehicle, check out our free resources about used car prices, what to check when test-driving a used car, and what to consider when buying a used vehicle, so you can make an informed decision about your purchase!
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