Need modified car insurance? Steps to get affordable cover

Modified car insurance

Range of modified vehicles

Had some work done on your car? Get specialist car insurance for your tailored vehicle.

So you’ve added a hydraulic suspension to your Honda Civic, racing spoilers to your Camaro or a supercharger to your Cadillac. Now you’ve got to find insurance to cover your car and all of its modifications.

A modified car is one that’s had changes made to it by anyone other than the manufacturer. In some cases standard car insurance won’t cover these vehicles and you’ll need to find special insurance for certain modifications. In general, modified cars can be more expensive to insure, but increased competition among insurers means it’s still possible to get affordable cover for your vehicle.

In general, insurance companies find that drivers who make modifications to their cars tend to be a higher risk, because of the likelihood that the car will be used for racing, and the reality that the modifications added are worth more than the car itself.

We’ll help you better understand your options when it comes to getting coverage for your modified car.

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Rates last updated February 24th, 2018
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What car modifications are covered by insurance?

There are changes that you can make to your car without having to make changes to your insurance. Modification coverage varies by insurance companies, but in general the following modifications are generally covered:

    • Alloy wheels
    • Bicycle racks
    • Bull bars
    • CD stackers
    • Chrome exhaust systems
    • Driving lights
    • Leather seats
    • Reversing cameras
    • Roof racks
    • Tow bars
    • Sunroofs

Modifications that need additional coverage are:

    • Custom paint work
    • Roll bars or roll cages
    • Racing harnesses
    • Nitro or hydrogen fuel equipped engines
    • Turbo or supercharged engines
    • Sound systems like stereo, DVD or computers
    • Auxiliary lights
    • Custom tires, rims or spinners

What type of insurance do I need?

You’ll still need coverage like liability or comprehensive to cover you customized car, but you’ll need additional insurance to make sure your car is taken care of when you file a loss claim in the event of an accident. There are two options available to you:

  • Supplemental coverage. This is extra coverage offered for mods and aftermarket changes made to your car. The premium for this coverage depends on the insurer, but can cost up to 10% of the modifications. Some insurance companies will pay up to $4,000 for customized parts and equipment coverage if those items need to be replaced or damaged.
  • Classic/collectible car insurance. There are companies that specialize in insuring your modified car. If you’re unable to find a carrier that will provide adequate coverage, insurance companies like Hagerty, J.C. Taylor, Condon Skelly, Grundy and American National all specialize in providing cover for collectible cars.
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What can specialist car insurance do?

Most mainstream insurers shy away from performance enhancing modifications, so if your vehicle has other modifications, particularly to the engine, chassis or suspension, you may need to approach a specialist insurer for cover.

Specialist insurers are more willing to insure enthusiasts who devote time, money and care into their cars. They understand that most custom cars are protected with special garages, kept clean and are generally well-cared for.

Agreed value or market value

If you’re ever in an accident and need to file a claim with your insurance company, you want to make sure you get fair value.

    • Market value. A market value policy pays the car’s current market value, subject to depreciation, at the time of a claim. The replacement value of the car fluctuates with market conditions. A modified car insured under market value will almost always be underinsured, and not covered for its actual value. Market value is rarely used for modified or classic cars.
    • Agreed value. Agreed value is how much you and your insurer agree the car is worth. This number is locked in at the time of purchase, and can only be changed at certain times. This is especially useful for heavily modified or classic cars, but generally costs more. Agreed value is almost always used for modified or classic cars.

Modified car insurance for young drivers

Young drivers under 25 years old often find it difficult to get cost effective insurance for custom cars. This is because they’re hit with age-related cost increases as well as extra expenses associated with driving cars that have added features. These are risks that insurance companies take into account when determining premiums, and sometimes outright refusing to cover younger drivers. If you’re a young driver with a modified car, and are having trouble getting insured, it’s helpful to:

    • Compare your choices. Look at modified car insurance from specialty car insurers, and not just the big names. They’ll consider things like your safe driving past, claims history and whether you have any driving offenses rather than automatically assuming that modified vehicles are riskier.
    • Expect to pay more. Modified cars are more valuable than unmodified equivalents, meaning that both their premiums and excesses are already inflated. If you’re able to accept even higher deductibles though, this can significantly lower your premiums.
    • Look for discounts. Some specialty insurance companies offer discounts that can significantly lower your premium. Consider taking defensive driving courses, trying to maintain a spotless record, looking for multi-policy or drivers club discounts, installing safety features, declaring a lay up or limiting your driving.
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Is it possible to get cheap cover for modified cars?

It depends. How tripped up is your car? Like any car insurance policy, there are lots of ways to reduce the cost of your premiums when buying modified car insurance. These include:

  • Driving a less expensive, less powerful vehicle.
  • Restricting the age and number of drivers.
  • Choosing a pay-as-you-go option.
  • Increasing your excess.
  • Adding security such as a car alarm or engine-cut system.
  • Packaging your insurances with one provider for a loyalty discount.
  • Choosing a company that offers a bonus for having no claims.
  • Insuring for market value rather than agreed value.
  • Looking for online discounts, sometimes up to 20% savings.

Insurance rules for modified cars

  • Is your modification legal? Each state has their own laws concerning car modifications. Be sure that all modifications made to your car are street-legal, otherwise no insurer is even going to look at you. If you’re stopped by the police with illegal modifications, you might face a fine and have your vehicle towed on the spot.
  • Do I need to tell my insurer if I make modifications to my car? Yes. If you don’t tell your insurer, they can reject your claims and cancel your policy. If your vehicle is under warranty and you don’t tell the insurer, you may void the warranty entirely.

Modifications which are typically permitted include:

  • Additional lighting
  • Air shock absorbers
  • Alarm systems
  • Radio and stereo systems
  • Roof racks
  • Single tone air horns
  • Stabilizer bars

Modifications which are typically not permitted include:

  • Dark window tinting
  • Loud exhaust systems
  • Changes to the engine that do not fit the legal standard
  • Illegal changes to the chassis
  • Noncompliant changes to the tires
  • Changes to the suspension that do not comply with legal standards
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What to consider when finding insurance for your modified car

Here are some important things to think about before you decide on insurance for your souped-up ride.

  • Weigh risks and costs. Even if your insurer will cover you, the changes you make could result and an extreme increase in your premium, sometimes well over the value of the car.
  • Talk to an agent. Anytime you make modifications to your car, it’s best to talk to an agent.
  • Read the fine print. Look through your existing policy to better understand what things are included already.
  • Get information in writing. To be sure that you have all of your modifications covered, your agent can provide a clear list of the policy through email, letter or any other document.
  • Be honest. Don’t ever try to hide changes made to your car. If your car isn’t insured for the right amount, then you’ll lose the value of your modifications in the case of an accident. Your insurer also has the right to cancel your policy or deny a claim if you fail to disclose changes made to your car.

Bottom line

One of the main reasons that insurers charge substantially more for custom modifications, or refuse to cover them at all, is because such modifications unpredictably increase the value of the vehicle. Unlike standard parts which cost a set price to replace. Custom parts cost more to replace and so insurers charge more to cover them. The more extensive and expensive the modifications, the more you can expect to pay to insure them. The cost of replacing them is huge and therefore, so is the cost of insuring them.

Compare modified car insurance policies

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