Can Modifying My Vehicle Affect My Insurance?
Your car insurance premium is based on a number of factors, including the type of car you drive, your personal driving record, and where you live among other things. And since the “type” of vehicle you drive is one of the key factors, it shouldn’t surprise you that modifications to your vehicle is something important your insurance provider needs to know about. If you’ve made modifications to your vehicle without informing your insurance carrier, there is a chance you’ve actually violated the terms of your policy and could technically be driving around uninsured.
Why Vehicle Modifications Affect Insurance
There are two key reasons why modifying your vehicle can impact your insurance: It can affect the safety and performance of your vehicle; and, it can affect the overall value of your vehicle.
When applying for insurance you’re required to provide the details about your vehicle’s make and model. This lets the insurance company calculate premiums based on how safe the vehicle is (based on its performance and safety record) as well as allowing them to estimate the overall value of the vehicle (based on its value on the market.) Any modifications to these two elements will affect the insurance company’s appraisal of your vehicle, and by extension, your insurance policy.
In some cases, the effect might be raising your insurance premiums, but in the worst-case scenario it could mean termination of your insurance policy entirely.
Modifications Impacting Vehicle Safety
If you plan to make any modifications to your vehicle that change how it performs, it’s prudent to contact your broker/CSR before to do the work to understand how this will affect your policy. You wouldn’t want to invest in the modification only to have to undo it for inability to get your vehicle insured.
Changes which might impact performance and safety include:
Modifications to the engine
Modifications to the vehicle’s suspension
Modifications to the brakes or braking system
Modifications to the vehicle’s transmission
Increasing or decreasing the tire size
If you’re looking at making any of these modifications, take into account that they may raise your insurance premiums or force you to seek a new insurance agency which is willing to insure a modified vehicle.
Modifications such as lowering the suspension and altering the size and/or power of the engine are often considered to put the vehicle at higher risk of being in an accident. These are the types of modifications that are most likely to impact your insurance premiums.
Modifications Impacting the Vehicle’s Value
Unless explicitly stated in the policy, most insurance policies do not cover aftermarket parts, or offer only a small allowance for aftermarket modifications. This means that if you want to add something to your vehicle which increases its value like an expensive aftermarket sound system, custom paint job or aftermarket rims – these might not be covered under your insurance policy.
In fact, in some cases, modifications can void your insurance policy. As well, some insurance companies consider certain modifications as an increased risk for theft or vandalism.
If you’re planning to modify your car with aftermarket parts and want them to be covered, you can expect your insurance premiums to rise. Contact your broker/CSR to discuss the details and find out how much coverage is available for vehicles with these types of modifications.
Always Notify Your Insurance Agent About Modifications
When modifying your vehicle or purchasing a modified vehicle, it is extremely important that you inform your insurance company about the modifications. This is a responsibility placed entirely on the insured individual and the insurance company has no obligation to ask about or investigate modifications.
If you are in an accident and your insurance company finds out later that your vehicle was modified and you failed to inform them, your insurance could be revoked, leaving you liable for the damages and cost of the accident.
For customized vehicles with extensive modifications, it may be necessary to look for a specialized insurance company which deals with modified vehicles, as standard insurance companies may be unable to insure the vehicle.
Want to Know More About Vehicle Modifications?
If you want to make modifications to your vehicle, there’s no harm in that, just make sure you still have the right coverage, and that can be a confusing topic to figure out on your own. That’s where a DPM Insurance Group broker/CSR can help. Before you make any changes, give us a call. We’ll help you figure out how it will affect your insurance, and how much it’s going to cost.