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Modified Auto Insurance Defined – Forbes

Modifying a vehicle to make it faster or safer has an impact on auto insurance premiums. But how exactly does it work? Here you will find everything you need to know about modified car insurance.

Premiums and Risk

The price you pay for car insurance reflects the likelihood that you will make a claim. For example, if you live in an area with higher than average crime rates, or if you park your car on the street rather than in a driveway, this will likely increase your stated rewards.

If you drive an expensive and powerful car, you will likely pay more for coverage than if you insured a run-around with a small engine.

In other words, the more likely you are to charge your insurer in the event of a claim – and the more they will have to pay for repairs or replacements – the more insurance premiums you will be charged to cover the additional risk.

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How changes will affect the rewards

But whether changes to your vehicle increase or decrease the risk of an insurance claim depends on what those changes are.

For example, aftermarket security systems such as electronic immobilizers or car alarm systems make it difficult to steal a vehicle. Since the risk of being reported for theft is reduced, insurers can offer cheaper insurance coverage in return.

Mechanical modifications, on the other hand, such as replacing your vehicle's drivetrain (which provides power to the wheels) increase acceleration or top speed. Now that you drive a more powerful car, you can move up to a higher insurance group where the premiums will also increase.

Cosmetic modifications such as tinted windows, aluminum rims or vinyl foils can also affect your insurance as they could make your vehicle more attractive to thieves.

Changes that make it easier for disabled drivers or passengers to access, such as tail lifts, ramps and electronic accelerators, are also considered changes that can affect the cost of your insurance cover and, like any changes, must be reported to your insurer.

Together Modifications

Alloy wheels

Wheels are a simple modification that can change the appearance of a vehicle significantly. Unfortunately, thieves can remove them almost as easily as you can assemble them, even if they are secured with a lockwheel nut. Insurers calculate their premiums to take this risk factor into account.


An aftermarket exhaust can improve the performance of your vehicle, and anything that makes a car more powerful increases the chances of you getting a claim – at least in the eyes of your insurer.


Lowering the suspension to get your vehicle closer to the road than the manufacturer intended is mostly for cosmetic reasons, but can cause problems with ramps, towing, and uneven tire wear. Your insurer can increase your premiums accordingly.


Installing a turbo engine increases the speed of your vehicle and increases fuel efficiency. Insurers can conclude from your need for speed that you are a riskier driver and increase your premiums.

Spoilers / body kits

Spoilers and extensions on your car's bumpers and skirts can drastically change the way it looks. Given the value of such parts – both in terms of what you paid for them and how attractive they were to thieves – insurers sometimes charge more to insure such vehicles.

Inform your insurer

Whether you are buying a modified car or making changes to an existing one, you need to tell your insurer what was done with the vehicle.

Taking out an insurance policy is a good faith agreement. The insurer undertakes to pay for any claims, provided that you have given complete and precise information about yourself and your vehicle.

If you make a claim without disclosing any changes to your vehicle, the insurer may deny your claim on the grounds that you were not honest in your claim. In this case, you will have to pay for repairs or replacements out of pocket.

It is best to speak to your insurance provider before making any changes to find out whether your existing policy covers the changes or whether you need to expand your insurance coverage.

Some modifications, such as B. colored underbody lights can be illegally installed on your car. If your insurer refuses to accept your changes, they also reserve the right to terminate your policy should you proceed anyway. If a policy is canceled, it can become more difficult to find affordable insurance in the future.

Some changes need to be reported to the Driver and Vehicle Registration Authority (DVLA) by updating section 7 of your vehicle's V5 document, which you should have received when you purchased the vehicle.

The types of changes the DVLA would be interested in would be things like changing the color of your car, engine displacement (CC), or fuel type e.g. B. the conversion to liquefied petroleum gas (LPG).

Keep costs down

If you are committed to modifying your vehicle and understand that it could mean paying more for coverage, there are other ways to keep your costs down.

The first point of contact is a price comparison to find out which insurer offers the best price for the insurance coverage you want. Insurers are currently prohibited from offering new customers lower premiums than existing customers with the same insurance coverage, so that they can no longer use this tactic to compete with other insurers.

As a result, insurers may need to make their overall pricing more competitive if they want to increase their market share, and you can benefit from it.

If you drive less car because Covid restrictions mean you work from home either full-time or part-time, just keep in mind that your annual mileage will likely be lower than usual – and this can save you money.

If you can, it is cheaper to pay your premium for the year in advance than in monthly installments, since there is no interest to be paid.

Increasing the amount you are willing to voluntarily pay in order to claim a claim can also decrease your premium. Just make sure you are willing to pay these on top of your mandatory deductible.

frequently asked Questions

Are car modifications illegal?

No, far from it. While some popular modifications are illegal, such as tinted windows that let in less than 75% of the light, underbody neon lights, and negative camber wheels, many more modifications are perfectly legal.

Which car modifications do not affect the insurance?

Almost every aftermarket change you make to your vehicle will affect your auto insurance premiums. Some, such as performance enhancements, make insurance coverage more expensive, while others, such as parking sensors, can lower your premiums.

Can I take out special modified car insurance?

There are niche insurance companies that specialize in protecting drivers with modified engines. Some claim they don't charge anything extra for cosmetic changes, but it's still worth comparing their premiums to those of mainstream suppliers as their prices may be higher initially.

Compare car insurance quotes

Choose from a range of insurance options for affordable coverage that suits you and your car.

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