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How Your Car Insurance Premium is Affected by Modifications

You may be a car enthusiast, fond of making modifications to your four-wheelers to make them look or perform differently. However, be careful about the changes that you make to your vehicle because many of them can affect your motor insurance premium. While third p​arty car insurance is compulsory as it helps in case of legal liabilities due to damage caused by your car to a third-party, own damage or comprehensive plans offer extra protection. But in all these cases, the premium is likely to get affected if you modify your car without following the rules first. So, read on to know what a car modification really is, what are the types and which ones can impact your premium.

 What is a car modification?

A car modification can be anything from a minor change to a significant one made to a vehicle to tweak its performance, appearance, or both. It refers to any change made to a car in its original condition. Car modifications include the optional extras that car dealers offer when you purchase a new four-wheeler. You may opt for add-ons to your cars, without realising that you are paying for modifications to your new vehicle.

Poor-quality modification of vehicle parts can affect the vehicle's functioning and safety. Always choose reputed professionals when getting the modifications done.

 Car Modifications are broadly classified into three categories:

  • Aesthetic modifications​​
    Aesthetic modifications change the internal and external appearance of the vehicle. Some of them also change the performance of the car. Paint jobs, installation of body kits, different headlamp or tail lamp clusters are a few common aesthetic modifications.
  • Performance modifications
    These modifications enhance the car's performance by boosting its handling, power, and fuel efficiency. Such changes usually extend to the brakes, tyres or wheels, engine, exhaust system, air filters, etc.
  1. Functional modifications
    Functional modifications change the vehicle's functions or add new ones to it. These include installing a navigation system, car phone, air conditioning system, sunroofs, among others.
    Modifications that affect your insurance premium
    Many times, changes in your car without the insurer's knowledge may lead to the car insurance policy getting cancelled when you file a claim for an accident or theft. Below are some modifications that may increase your car insurance premium:

1. Wheel modifications

Modifications to the tyres or wheels typically enhance the look of the car. Upgrading the wheels may also increase the value of your car. Therefore, it is recommended that you inform your insurer if you make such modifications.

2. Paintwork

Changing your car's paint can significantly modify its look, especially adding eye-catching patterns and designs similar to racing cars. While changing the paint may seem like a harmless modification, you still need to inform your insurer about it. This type of modification increases the risk of your vehicle getting stolen, due to which the insurer may hike your motor insurance premium.

3. Engine and mechanical modifications

Modifications that boost the performance of the engine or acceleration speed also increase the risk of an accident. Since overtaking, over-speeding, and other such activities lead to accidents, getting a turbocharger, supercharger, or nitrous oxide injection kit added to your car can increase your car insurance premium.

4. Brakes and suspension

Irrespective of the vehicle, the brakes are responsible for its control. Upgrading the braking or suspension systems of the car drastically affects its performance by changing the power and speed. Therefore, the insurance company needs to assess any change to such critical parts. You must inform your insurer about such modifications, which include details about the service provider.

5. Non-standard engine change

Your car's engine is one of the primary aspects that determine your insurance premium. Getting a non-standard engine installed in your four-wheeler is a major modification and increases the risk of accidents or breakdown. Due to this, your car insurance premium will spike.

You must inform your insurer about the process because they calculate the insurance premium based on the quality of the products installed, the make and model of your car as well as its manufacturing year.

6. The car's interior

Changes to the sound system, pedals, steering wheel, seats, etc are considered crucial by insurers. So, you must inform your insurance provider about such modifications. The quality of the products used and their wear and tear reflect in your insurance premium.

 Modifications that do not affect your insurance premium

Insurance companies do not consider some changes like installing parking sensors as modifications because these alterations help protect the car from damage by reducing the risk of accidents or thefts. Such car modifications do not affect the insurance premium.

 Why you must inform your insurer about car modifications

Insurance providers calculate the premiums based on various factors like the make, model, mileage, specifications, vehicle condition, accessories, market price, etc. When a modification is made to any insured car, it changes the parameters of the premium calculation. The insurer has to analyse and calculate the premium accordingly.

If you buy a second-hand four-wheeler and are unsure about the car modifications, get the vehicle examined by a mechanic. Also, intimate the insurer about any modification you would make to the car in the future.

If you do not inform the insurer about car modifications, whether intentionally or not, the insurer may nullify your coverage. If your insurance gets cancelled, it may become difficult for you to get car insurance in the future.

Do not hide the information or wait until the last minute because it may create problems when you file a claim.  It may cost you more to sign up for a new policy in such a situation.


While you have the freedom to make modifications to your car, make sure that you know the consequences. For instance, certain performance modifications can cause your vehicle to malfunction or damage other parts. Also, you may have to pay a higher car insurance premium if you make certain modifications. So, the wise thing to do is inform your insurer before getting modifications done to your car.​