Modified Car Insurance

Today's drivers are often attracted to the slickest driving machines. However, before you "soup up" your vehicle to improve its appearance or performance, you might want to familiarize yourself with modified car insurance.

What Is Modified Car Insurance?

Car insurance companies have access to extensive databases of stock, or factory, vehicles. Each make and model is evaluated and precisely rated for:

  • Collision damage.
  • Liability.
  • Theft damage.
  • Vehicle safety.

Insurers base their rates on how much it will cost to repair your car and any damage it may cause to others or their property. They use the vehicle's original specs from when it rolled off the factory floor to determine that figure and then calculate a fair rate.

When people make significant changes to their vehicle, these are referred to as modifications. They are often defined as any alteration or enhancement of appearance or performance. This term also covers instances when auto features are removed or substituted.

Vehicles that have been altered may need modified car insurance. This type of auto insurance may also be called custom parts and equipment coverage. Either way, it typically carries additional or higher premiums.

Why Auto Insurance Companies Charge More for Modifications

Modified automobiles present unique and often costly challenges for vehicle insurers for a number of reasons, such as:

  • Safety.
    • For example: Truck lifts are a popular modification, but a raised chassis increases the consequences of a crash, at both the front and tail end. Lifted vehicles may also be more prone to rolling over. Most states impose height restrictions on vehicles as well as regulate the lights and reflectors.
  • Sheer Power.
    • Engine replacement, also known as repowering, is another popular modification. Insurance companies equate more horsepower with greater speed and increased risk. Many passenger vehicles are now lighter than ever before with performance technologies that enable them to reach greater speeds.
  • Customized Repair.
    • Show-quality paint jobs start at a modest $5,000 and rapidly escalate to $20,000 or more. Properly repairing a two-tone metallic door panel or eight-layer clear-coated chameleon hood and fender could easily cost well over $10,000.
  • Domino Effect.
    • Safety and functionality often demand that one upgrade necessitates another. Increased horsepower can affect everything from engine mounts and radiator size to the transmission and driveshaft. Lifting a vehicle or swapping in larger tires can also impact both safety and functionality.
  • Distraction Factor.
    • Underglow or ground-effect lighting, for instance, is an increasingly popular modification. However, many authorities also view undercarriage lighting as a distraction and potential danger. Some states completely ban it while many others impose restrictions on the practice. Some lighting fixtures are not suitable for on-road use at all.

How to Know If You Need Modified Car Insurance

What qualifies as a modification can vary by state and insurance company. Changes you make to your vehicle can affect whether:

  • You can register it in your state
  • It will pass required inspections
  • Insurance will cover it

Since modifications often impact policy coverage, you should contact your insurance agent prior to making any upgrades or enhancements. Some common modifications include:

  • Fuel system changes or boosters.
  • Engine repowering or horsepower increases.
  • Performance exhausts and intakes.
  • Chassis or frame alterations, including vertical door kits.
  • Body changes, including spoilers or aftermarket roof openings.
  • Lighting accessories, including underglow or other nonstandard lamps
  • Suspension and lift kits.
  • Special tires or wheels, including racing slicks or oversized equipment.
  • Chrome or leather extras.
  • Aftermarket electronics, including stereos and other media equipment.
  • Custom paint and cosmetic enhancements.

It's important to remember that if you don't buy modified car insurance, you risk not being reimbursed for your specialty parts and equipment should an unfortunate event occur.

Covering Modifications With Other Car Insurance Options

Not all car insurance companies offer policies for modified vehicles, citing exclusions or exceptions in the car insurance policies they write. They may also invoke caps, meaning they will reimburse you for losses only up to a certain dollar figure.

In some cases, insurers may offer a modified policy but call it something else, like custom parts and equipment insurance. Some insurers offer stated or agreed policies that enable you to insure your vehicle for an amount greater than book value for a higher premium. They may also refer you to a sports car or collector car policy. An insurer may offer a specifically tailored option for modifications that alter a vehicle for disabled drivers or passengers.

With modified car insurance, any non-stock alteration to a vehicle's performance or appearance can impact car insurance premiums and coverage. You should always take the time to understand your individual policies and honor the agreement down to the last piece of chrome.