How Car Modifications Affect Insurance Premiums?

​Buying your favourite car is nothing less than an achievement. You go through so many sites, apply for a car loan, and then get the best deal to buy your new car. Getting a new car comes with several responsibilities, and one of them is insuring it.

Since you now own the car of your dreams, you would want to give it a personal touch in the form of customization. This could be anything from adding new lights to the car to revamping its upholstery. But what if you are looking to make a significant modification to your vehicle?

Few changes that you give to your car can impact the amount of your car insurance policy premium. Hence, it is better to think about the potential costs that a modification can bring with itself. Modified vehicles bear higher risks than cars with no changes. The more you add to your car, the more you need to be scared of it being stolen. It is also seen that customizations are usually carried out by young drivers. Insurance companies have a notion that those drivers are unsafe behind the wheels. Also, the upgraded parts actually cost more than their actual value.

What Modifications Affect Car Insurance Premium?

You can make several modifications to your car. A modified car is one which has been altered for enhancing the appearance of performance. Your car insurance company may classify your car's modifications into specific categories. Here are a few examples of the types of changes-

Appearance modifications

Performance modifications

Structural modifications

If you have made any kind of adjustment in your car, you should certainly inform your insurance company of the same. The insurer will most likely add an endorsement to your car insurance policy due to which you have to pay an additional premium. Some of the modifications that could result in premium-bearing endorsements are the following: Chrome bumpers, fog lights, racing tyres or chrome wheels, hood ornaments, spoilers at the front and rear side of the vehicle, accent lights under the car, improved stereo equipment.

Your car insurance premium will increase based on the type of modification you install and the risk that the insurer views in the upgrade. Insurance companies consider modifications concerning the look and performance of your car, as a higher accident risk. These alterations include engine changes, spoilers, body-kits, sports seats, etc. Enhancements can increase the value of your car, and it may even make it more prone to theft. If your vehicle has been modified, you must declare the changes to your insurer even if you have not made the changes yourself; else your car insurance will be invalidated. It is also essential to update your insurer as and when you make additional modifications so that you remain covered. Failure to report a car modification can result in your policy being nullified. So, you should be extra careful about that. If your insurance gets canceled, you will find it even harder and more expensive to get your car covered in the future. So, if you're in any doubt, double-check and declare.