Getting the Most Out of Your Auto Insurance

Insurance and Modified Cars

12 November 2019

Eleanor Allen

Your auto insurance policy only covers your car as long as you use the car in its original state. You might jeopardize your coverage if you modify your car too heavily. Below is an overview of why modifications pose problems for insurers and what you can do if you want to operate a modified car.

The Problem

Modifying a car may create a number of problems, but these two are the ones your auto insurance carrier is most likely to worry about.

Safety Issues

Some modifications increase the risk of an accident or the risk of extensive injuries and damages in case of an accident. Such modifications increase the risk your car poses to your insurance carrier. Since risk is the primary determinant of auto insurance premiums, the increased risk means your auto insurance company cannot continue providing you with coverage based on your initial rates (before you modified the car). Modifications that make the car more dangerous include modifications that raise the car, boost engine power, and those that change the type of fuel.

Cost Factors

Some modifications increase the value of a car or make a car more difficult and expensive to repair. For example, a car with a modified engine may be more expensive to repair than a car with a stock engine. Another example is a car modified with gold-plated rims, which are more expensive than standard rims. Your insurer would have to cater for these costs if your car was damaged or written off. Unfortunately, your initial premiums did not take into account the increased costs.

The Solution

The above issues don't mean that you can't insure a modified car. However, there are a few things you may have to do to ensure continued coverage.

Carrier Notification

Almost all insurance companies require you to notify them if you want to modify your car. This is especially true of modifications that are more than cosmetic. The insurance company will clarify whether your policy will cover the modification, and if not, what you need to do to continue enjoying your coverage.

Enhanced Coverage

In many cases, you will need enhanced coverage for your modified car. If the modifications are particularly expensive or extensive, then your carrier may require you to buy modified car coverage, which is specifically meant for modified cars.

Consult your insurance agent for more information on modified car insurance. If you are worried about costs, then the agent can also help you identify discounts to help you lower your effective rate.

For more information about insurance, contact a company like Budget Insurance Offices Inc.

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