Modified cars draw a higher associated insurance premium. This is bad news for most motor car enthusiasts. If you own a modified car, or plan to modify your existing car, read on.
Modified cars are mostly driven by enthusiasts, and auto insurance companies see this as a high risk factor. Arguably it is possible that a car is indeed safer in the hands of an enthusiast; sadly that’s not the way most auto insurance company sees it. Another point of concern is that a modified vehicle is categorically more expensive than an un-modified vehicle, and they are of higher value to an automobile thief, which again associates a higher risk for your insurer.
Automobile insurance companies compare the current configuration of your vehicle, to the “stock” (factory) configuration of the vehicle to differentiate between modified and non modified cars.
Since the benchmark used to measure modification is so ambiguous, even the tiniest of modifications can mean a higher insurance premium for you! Something as simple as alloy wheels, or a body kit, or even an upgrade to louder pipes, will all qualify as a modification.
Automobile insurance companies differentiate between modifications too; there are superficial modifications, and performance modifications. Alloy wheels and tinted windows are classified as superficial modifications, while a bigger carburetor and a free flow exhaust system will classify as a performance modification.
High performance cars are at a higher risk of getting into accidents, which means bad business for auto insurance companies; this is the reason why many of them are no longer willing to insure a car with a lot of modifications. Now while most companies don’t insure modified vehicles, the few who do, don’t exactly go easy on them either, the premium associated with a modified car is significantly higher.
It’s best to find a company who specializes in insuring modified cars to insure your car. Under normal circumstances getting multiple quotes and comparing them is essential, when you have a modified car, it’s all the more important. Go to as many insurance companies as you can, provide them with information on the modifications, and ask for quotes. Then compare, and see which one suits you and your pocket best.
When taking a new insurance policy, or after you have modified your car with an existing insurance policy, it is mandatory to inform your auto insurance company of the same. Be honest about the modifications; provide them with all the details they require. If at a later date, your insurer finds out that you hadn’t revealed all the details to them, they can increase your premium to an amount they consider fair, or worse still cancel your policy. It is also possible for them to press charges.
Sadly, there is no way of calculating the effect a modification will have on your insurance premium. It is of course directly proportional to the extent of the modifications carried out.
On the bright side; not all modifications can cause an increase in your premium, safety related modifications can help you decrease your insurance premium by quite a bit. For example, a car burglar alarm decreases the chances of your car being stolen, which means a lower associated risk for your auto insurer, and they will share this benefit with you in the form of a discount on your insurance premium.
Best said, if frugality is what you’re looking for, its best to avoid modifications as far as possible.