There are a lot of people out there who take a ton of pride in their automobiles. Their cars are more than just a means of getting from point A to point B. Their vehicles are an expression, an extension of themselves. The cars are their canvases, and the modifications are their paintbrushes.
As beautiful, stunning and even outrageous as some modifications are, there is one undeniable truth – the alterations on a car will almost always affect car insurance premiums. Modifications can affect the value of an automobile, its performance and how attractive it is to thieves. All of these factors matter to car insurance companies, yet it is something that is rarely considered by motorists before they alter their automobiles.
Let’s begin by defining what exactly is a “modification” or rather, how the car insurance companies define it. Then we can explore how this alteration may affect your car insurance premium.
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What Is Considered A Car Modification?
Auto insurance companies define any change to a car after it has been manufactured to be a modification. As you can see, this is a pretty broad definition. For the most part, the changes have to be of a permanent nature that are not easily undone (for example, a new paint job).
Modifications come in two basic categories – performance and aesthetic. Performance modifications are any changes that affect how the vehicle operates. These can include changes to a car’s engine, suspension, tuning, filter, and exhaust system. Fitting under the heading of aesthetic modifications are new paint jobs, body kits, tinting, and spoils.
How Will A Modification Affect Car Insurance Premiums?
The affect of a modification on car insurance premiums depends greatly on what the change to the car was and the individual insurance company. Obviously, certain modifications will have a greater affect on premiums than others. For example, let’s say a policyholder decides to install a souped-up, high performance engine. This new powerful engine is seen as making a car to be more risky to an insurance company. Well, more power means increased speed, which can translate to more tickets and potential crashes. In this scenario, the policyholder would most likely have to pay higher rates.
However, it’s not just performance alterations that can cause an increase in premiums. Certain aesthetic changes can result in elevated rates. For instance, let’s say another policyholder gets a snazzy paintjob and outfits his vehicle will all sorts of bells and whistles. These modifications can have one unintended consequence – the car is now more desirable to thieves. This is an increased risk to car insurance companies and they will raise the policyholder’s insurance premiums to compensate.
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Should I Report A Modification To My Insurance Company?
Since it appears that a lot of modifications will end up affecting your car insurance premium, it may be tempting to forget to report these to your car insurance company. After all, what they don’t know won’t hurt them and you will end up saving money. Well, this is a bad idea for a number of reasons.
First, any alterations to your vehicle may in fact invalidate your car insurance policy if the insurer finds out about it after the fact. Think of it. You get into a collision and because of some modifications you made to your vehicle, your insurance company refuses to your honor your claim. It can happen.
Second, an insurance company won’t pay for losses that haven’t been declared beforehand. That means if you made a bunch of expensive alterations to your vehicle and your car is stolen, you won’t be compensated for them. The insurance company will not factor in these modifications and instead you will only receive the current market value for your vehicle, even though it may be worth a great deal more.
In short, always report modifications to your insurance company. If in doubt, report it. It’s safer. And you certainly want the modifications to be covered.
Ways To Make Modifications And Still Keep Premiums Down
Car modifications don’t necessarily have to greatly affect car insurance premiums. For one, some comprehensive policies automatically cover alterations up to a certain amount, usually in the neighborhood of $1000. This way the modifications are included in the policy and premiums may remain unaffected.
If this $1000 amount doesn’t satisfactorily cover the modifications, you can look into getting “Custom Parts and Equipment” coverage. This coverage is offered by most major insurers and can be purchased for fairly cheap.
There are also a few strategies you can use to offset the cost of increased premiums due to a modification. One tactic is to install a new security system. Data and research has proven security systems reduce the chance of theft, so insurance companies will normally lower your premiums when you install one. Look into getting a new security system such as a car alarm.
Also, just because your insurance company decided to raise your rates, doesn’t mean that you don’t have options. Get multiple car insurance quotes and find the cheapest car insurance possible. Compare the quotes and choose the cheapest rate offered. It really is that simple. Start by entering your zip code in the box below!