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How to Insure a Modified Car?

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Have you ever considered adding more style to your car with the new music system? Or think about powering your car with the new set of alloy wheels? Well, a modification can be one of the great ways to personalize your vehicle, however, there is a downside though— it can toughen your car insurance deal.

What is car modification?

A modification to the car means making changes to a vehicle so that it looks different than what it was at the time of buying. In short, modification means customizing your car as per your taste. Here are some instances of modifications=

  • Replacing the exhaust system
  • Modifying the seats
  • Installing the new music system
  • Upgrading the wheel size
  • Adding tinted windows
  • Modifying the fuel system

It is not an exhaustive list, and there can be other modifications that you can do to accentuate the look, performance or functionality of your car.

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How do modifications impact your car insurance premium rates?

When you go for modification, you install various accessories in your vehicle which in turn increase its value. In certain situations, already installed parts in a car are replaced with the new parts. In any case, it will increase the value of the car, and therefore, the sum insured of the car insurance policy should match with the final value of the vehicle.

Further, modifications can affect a car insurance policy in the following ways=

  • Increase risk of accidents= Manufacturers vouches for the safety of cars which are manufactured by them. However, warranty ceases to exist if you modify your car. As modifications change the look and performance of the car, insurers consider them risky. Here changes mainly include, engine change, installation of the new fuel kit, sports seat, etc.
  • High risk of theft= Any modification is done to improve the aesthetic and performance of a car may also catch the attention of thieves and thus, such vehicles are more susceptible to theft.

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What if you modify the car after buying insurance?

If you have recently modified the car, i.e. after buying the car insurance, you should relook your insurance policy to ensure it is in sync with the current scenario. If the sum insured is less than its value, upgrade your car insurance coverage to bring it in sync with the value of the vehicle.

In case the accident occurred in a modified car, the insurer has all rights to reject the claim if you haven’t informed the insurer about the modifications.

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For instance, Rajiv Saran purchased a car insurance policy to cover his car. Being a car lover, he modified the vehicle with a new music system and CNG kit. However, he did not inform the insurer. Last month, when he was on his way back to his home, his car collided with the truck coming from the wrong direction. Though luckily, there were no physical injuries, it was his car which suffered a major brunt. He approached his car insurance to cover the losses or damages, however, the insurer rejected the claim as Rajiv did not inform them about modifications which he did this car after buying the policy.

The Final Verdict

Though modifications can have an impact on your car insurance policy; it doesn’t always mean a jump in the premium rates. There are some modifications like alloy wheels, new seat cover, parking sensors, etc.; which are considered low risk and therefore, may have low or zero impact on your car insurance policy. Further, some insurers also give discounts on premium rates if the vehicle is modified for blind, handicapped and mentally challenged people.

Similarly, if you have installed anti-theft devices in your car, your car insurer can offer you discounted premium rates also. As these devices will keep thieves away from your vehicle, your car insurer can reward you with lower insurance premiums. You can get extra discounts if these Anti-theft devices are approved by the Automotive Research Association of India (ARAI).

So, it would be good to inform your car insurance company about any modification and alter the car insurance policy accordingly.

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