Modified Car Insurance: How to Insure Your Custom Car or Truck

modified cars

Many people like to add custom modifications to their car, truck, or SUV. Modifications can look cool, enhance the vehicle’s performance, appearance, or sound, or even make the vehicle safer or more accessible. 

If you’re thinking of adding tinted windows or a lift kit to your vehicle, you might wonder how these custom mods will affect your car insurance costs.

The truth is, modifying your car or truck may affect your auto insurance premiums. At the end of the day, there are a lot of things to consider with custom modifications and car insurance. Read on to learn more:

Does Modifying your Car Affect Insurance?

Modifying or altering your vehicle does tend to affect your car insurance, but how much? Some custom modifications could cause your vehicle to be more expensive to repair. They could make your vehicle a more attractive target for auto thieves looking to steal custom parts or the vehicle itself. Custom mods may also increase the vehicle’s power or speed, increasing risks when driving the vehicle.

All of these are compelling reasons for an auto insurance carrier to request higher premiums for customers who own vehicles with custom modifications. Some carriers may offer lower premiums than others, however. Because of this, it’s important to understand what modifications create more risk to you, your car, or your insurance company.

What is Considered a Car Modification?

There are many different car modifications that your car insurance carrier may need to know about. Things that are considered car modifications (and can influence the overall value of your car and the price you’ll pay for an auto policy) include:

  •  Lift kits or low suspension – most places require at least 3 inches of ground clearance, and some limit vehicle height to less than 14 feet
  • Window and windshield tints
  • Undercarriage lights and neon lights
  • Spoilers and other custom body work
  • Custom rims, wheels or tires
  •  Removing seats/altering pedals
  • Exhaust pipes with emissions, or ones that can “roll coal”
  • Loud, roaring engines
  • Brighter HID or contoured LED headlights
  •  Light racks
  • Radar detectors or jammers  
  • Telematics devices or dash cams
  • License plate frames and tinted plate covers
  • Extra stereo, CB, or speaker systems or antennas
  • Muffler mods
  • Cold air intakes, engine swaps or any other modification that affects the performance of the car
  • Custom paint jobs or vehicle wraps
  • For motorcycles: Chrome parts, sidecars, or trailers

It’s important to note some of these modifications (as well as many others) may be illegal in certain states or may only be used in certain places or at certain times. For example, adding light racks to the top of trucks is common for off-roading, but when used in traffic on a highway, they can distract, confuse, or blind oncoming traffic.

How Does Modified Car Insurance Work?

Modified car insurance is often added by endorsement to your auto policy or, sometimes, it could be a specialty, custom car insurance policy. This coverage extends to modified parts. For example, if you add $2,500 in stereo equipment but do not insure it, your carrier does not know it exists and will not reimburse you for it if it gets damaged in an accident or otherwise.

Modified coverage for aftermarket parts and modifications – often called “custom parts and equipment coverage” – is available from some carriers. This adds coverage for customized parts and equipment you have added, in addition to the factory-installed parts. 

What Does Modified Car Insurance Cover?

Modified car insurance covers aftermarket parts and equipment added to the car or truck, but only those declared to your insurance company. Your carrier cannot cover a modification or alteration they do not know about, so listing additional parts as they are added is extremely important.

Of course, adding a small or inexpensive modification like a cheap phone mount is not something you would need to insure, given its minimal cost – but more expensive parts like stereo equipment or new rims is something you’ll want to have on your policy. 

What Does Modified Car Insurance NOT Cover?

Modified car insurance does not cover modifications that are not reported or specifically listed on your policy. Coverage also would not extend to anything illegal. It’s important to keep in mind that modifications may become illegal, depending on the state, if they could injure others or cause the vehicle to be unsafe on public roadways. 

Do I Need to Tell My Insurance Company about my Custom Modifications?

In most cases, yes, you need to tell your insurance company about your custom modifications. They form their rates for you based on many different factors, and your vehicle and its modifications and features are one of the bigger factors on that list. It’s risky not to tell your carrier about your custom modifications because it may invalidate coverage if they find out later, and you’ll have to pay to replace any modified parts out of your own pocket.

If you add custom modifications after you have purchased insurance for your vehicle, be sure to let your agent or carrier know so they can accurately assess any additional risk your modifications might bring. If your carrier does not know about your custom modifications, they will expect to see only factory parts that were installed by the manufacturer, and those are what they will base repair rates on. 

How do Car Modifications Affect the Cost of Insurance?

Car modifications affect the cost of insurance because they can make the property damage more expensive to repair or make the vehicle more attractive to theft or damage. Popular modifications to performance cars that make the vehicle more powerful or faster than it was designed to be can be dangerous for other drivers, which may increase loss severity – this can cause premiums to be higher.

Some modifications – like expensive stereo or speaker equipment – may make the vehicle more attractive for car thieves. This additional theft risk may also cause your premiums to increase.

At the end of the day, you’ll likely need to have an appraiser come out to give your insurance company a more up-to-date value of your vehicle.

Are there Modifications that can get me a Discount on my Car Insurance?

Adding a dashcam or telematics device to your vehicle may be considered a custom modification, and it may also net you a discount on your car insurance. Dashcams record what is happening in traffic around your vehicle and may offer valuable insight in the event of an accident.

Telematics devices measure things like miles driven, braking and acceleration rates, and lane deviations. This data can be useful for your insurance company, and so they may pay for it by offering a discount on your car insurance premium. Insurance companies are in the business of big data, and yours is valuable when aggregated with other drivers.

Usage-based-insurance (UBI) is insurance based on how many miles you drive and is often a good economic deal for drivers who don’t spend a lot of time on the roads, especially those working from home or with ery short commutes. In this case, a telematics device measuring mileage for UBI can save you money on your car insurance. Some car insurance companies specialize in UBI, and others offer a policy with UBI discounts.

Additional aftermarket anti-theft devices you install in your vehicle may also be modifications that can save you money through premium discounts. Ask your carrier if you have added any anti-theft devices that could cause your vehicle to be less attractive to car thieves – this could result in a discount. 

How is the Value of a Modified Car Calculated?

The value of a modified car can be challenging to calculate, since many custom modifications and aftermarket parts are designed for one particular person’s tastes. For example, a custom paint job may not appeal to a wide variety of people. Therefore, its value-add to the vehicle is low. 

Certain mods may only be appealing to car enthusiasts, or even a particular collector. Sometimes, classic cars will need special modifications to add modern luxuries like air conditioning or a radio. All of these change the value of your vehicle in one way or another. That’s why you need special coverage and not just any old standard policy.

For car insurance, you may decide to use an agreed value policy, where you and your insurance company agree on the value of your customized vehicle in advance. These policies can be more challenging to underwrite as your carrier will want to validate the costs of the modifications you list; however, it is simple if a claim is submitted as the value is already determined. 

How Can I Save on Modified Car Insurance?

Shopping around and comparing your car insurance options is a good way to save on modified car insurance. Some insurance carriers may be able to offer better rates than others. 

Shopping around for renewals can help you save money on modified car insurance, too. Just because your current carrier was the best deal when you purchased your policy does not mean they will always have the most competitive rate or be the best fit.

Another way to save is by talking with your carrier or agent in advance to see if certain modifications will increase your premiums. Then, you can make an educated decision if the long-term cost of your customization is worth the additional expense.

You can also try to increase your car insurance savings in other ways by maximizing any discounts you are eligible for. Electronic billing, good student, bundled home and auto policies, and paying your premium all at once rather than in monthly installments are all easy discounts to obtain that could help offset the extra premium costs from custom modifications.

You can take steps regardless of modifications that can help keep your premiums as low as possible. These include making sure you are a safe driver and avoid traffic infractions, tickets, and accidents. Additionally, maintaining a strong credit score can help keep your premiums more affordable, as some carriers use credit score as a rating factor. 

These overall cost reduction steps will help save on modifications by keeping your premiums as low as possible before adding the customization costs. 

Final Thoughts

Custom modifications can be a fun way to enjoy your vehicle and show your personality, but they can also be costly to insure. Make sure you understand the limitations and costs of modifications you are considering adding to your vehicle, and communicate with your insurance company or agent before making custom modifications. This will help ensure you know how much your modifications’ ongoing costs will be. 

Frequently Asked Questions

What Happens if you do not Declare Modifications?

If you do not tell your insurance carrier about custom modifications you add to your car or truck, it may invalidate your insurance coverage if you were to make a claim. Your carrier may rescind the policy based on misrepresentation or may elect not to cover additional damages to, or caused by, the custom modifications. This could be a costly mistake as those damages would be out of your pocket if your insurance carrier invalidated or denied coverage due to your failure to declare custom modifications.

Can car Modifications Invalidate Your Insurance?

Yes, car modifications may invalidate your insurance. If you do not tell your carrier about your modifications, this could cause an issue. Your insurance company may not want to cover this type of risk. If they had known about the custom modifications, they might not have insured you, leading to a non-renewal or cancellation. Adding an illegal modification to your vehicle may also void your policy. Check with your carrier to learn more.

Do you Have to Tell Your Insurer if you Modify Your car?

Yes. It is important to be honest with your car insurance company if you modify your car. If you get into a collision or submit a claim, they will find out about your custom modifications, and it could cause issues then if you did not tell them you modified your car.

Do you Have to Declare Tinted Windows on Insurance?

Yes, tinted windows for sun protection or other reasons should be declared to your insurance carrier. It is essential to understand that some window tint levels may be illegal in some states – usually, 30% to 35% tint level is the highest acceptable level of tint. Also, which windows on the vehicle are tinted is critical – side windows may be more acceptable to your carrier – and the police – than the front and rear glass the driver needs to see through to drive the vehicle safely.

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