How Car Modification Impacts Your Insurance Policy- A detailed Guide

You might feel tempted to change your car’s outlook and performance. The only way to do so is through a car modification. But I guess you didn’t calculate the perks of that. The sheer benefits are there. At the same time, car modification can increase your insurance amount. 

Do you know how car modification impacts your insurance premium? Let’s take an example to understand that. Imagine you increase your engine’s tuning. 

Or make a suspension upgrade to your vehicle. Now, there are chances that your vehicle will become more accident prone after the modification. Therefore, the insurance company will charge more to cover the additional risk. 

The Real Effect of Care Modification

For insurance companies, it ultimately comes down to risk assessment. It is the only parameter that insurance companies use to measure the insurance premium payable. 

The higher the risk, the greater your insurance premium will be. For example, you do a car modification and boost your vehicle’s handling characteristics. Meanwhile, it will alter the car’s speed capabilities. Certainly, your car becomes more risk prone when you do modifications like that. 

Is it The Same for Interior Modifications, too?

A lot of readers ask me this question as well. Now whare are the interior modifications that concern here. It might be custom sweat installation, or adding unique entertainment units to the car. These features can easily distract the driver. Consequently, the accident risk also soars.  

But there is a catch. Not all car modifications don’t increase your insurance premium naturally. For example, security modifications like alarm system installation or adding immobilizers can reduce the risks to some extent. 

It would be difficult to steal your car. As a result, you may have to pay a lower premium. The Car Insurance Act has a clear provision for that. 

Hence, a car modification does not always mean that you have to pay higher insurance. However, it will surely change the existing car insurance premium.

We will discuss how car modifications in car insurance affect your premiums so that you are better prepared when deciding to modify your insured car.

Types of Car Modifications in Insurance

The first thing to know about car modification is that it refers to modifications that make a difference to the original factory specification of the manufacturer.

Car modifications do not affect the third-party car insurance price, as this insurance policy does not provide coverage for any damage caused to your car.

Here are some prominent car modification types you should know about:

Interior Modifications

Changes in the interior of the car could include expensive modifications to the music system, dashboard, air conditioning, upholstery, etc. 

Exterior Modifications

Typically, exterior modifications include change in paint, adding graphics on the body of the car, adding lights, or changes in the bodywork of the car such as the tyres, panels, bonnet, etc.

Performance-Based Car Modifications

Modifications in the exhaust system, engine, air filter, etc., directly impact the performance of the car. For example, the addition of nitrous oxide to the mechanics of the car can add to its overall speed, and adding broader tyres can result in improved stability of the car.

Car Insurance for Modified Cars – How Do Modifications Affect Premiums

To understand modified car insurance premiums, you have to first understand that the more expensive your modified car part is, the more the insurer will have to pay when that part gets damaged. This is the primary reason why there is an increase in your premium amount if you make certain modifications to your car.

However, there are certain modifications that can lower your premium, like adding an ARAI anti-theft device to your car. Such a device lowers the risk of your car theft, which lowers the risk for the insurer, reducing your premium amount.

Car Modifications Premium Increase: Which Modifications Increase Premiums?

The following are some modifications that can increase the premium amount of your car insurance policy:

• Brakes – The suspension and brakes of a car control its speed, and including better brakes can increase car insurance for modified cars, as better brakes mean more control, which means that better brakes are more expensive to repair and replace. 
• Engine – Engine is another reason for higher premiums for car insurance for modified vehicles. This is because the more powerful an engine is made to be, the higher the cost of repairing and replacing it will be. 
• Aesthetic Modifications – If you make changes to your car’s appearance, it would increase the premium rate under most circumstances. The possible aesthetics that people do are custom body painting, change of body kitsor tinted windows. 
• Functional Mods – The functional modifications like tow bars, camper van conversions ,or other additions to the exterior bodie,s affect your car’s premium. It doesn’t make the car riskier. However, it increases the value of the car. At the same time, it becomes more appealing to mistreat.

Explaining the Effect of Car Modification

Your premium may increase anywhere between £100 – £ 500. Or more. Based on the significance of modifications that you are making to your vehicle. Mostly, any modification adds to your car’s net value. The scene changes when you make a cosmetic car modification. 

Such modifications are light weight and barely have any real effect on the car’s productivity changes. hence the change may vary from £50 too 200. Meanwhile, you should know that these are approximate figures. It might vary based on the scenario.

Conclusion

In conclusion, it is imperative that you declare any modifications that you make to your car, to your insurer. If you fail to do so, and raise a claim because of damage to your car, then the insurer has the right to reject your claim.

Read More:

• Understanding Liability Car Insurance And What Does It Cover
• 10 Reasons Cheap Car Insurance Will Cost You
• Things To Be Aware Of Before Doing Car Insurance Renewal