Modified Car Insurance

If your car has been altered since it came off the production line, it is a modified car.

Modifying your car helps you personalize it and add performance and cosmetic improvements that shout your identity.

However, modifying your car will significantly impact your auto insurance rates and coverage.

As a result, you need to inform your insurance company of any changes you make to your car so that you avoid a situation where your modifications will be uninsured.

But modifications vary, and you need to know what precisely a modified car means or which parts of the vehicle are involved.

What Is A Modified Car?

If your car has any alteration to feel, look, drive, or function differently from the standards of the manufacturer, it is categorized as a modified vehicle. The changes go as far as for manufacturer-branded accessories that are fitted to your car when it is (was) new.

Modifications can be something as small as just adding a phone mount or alloy wheels to something as high-budget as replacing the engine or turbo conversion.

Usually, car modifications are meant to improve performance, functionality, or just for general aesthetics. They can add value – or not – and sometimes increase theft risk, which then means that the driver becomes a higher risk.

Some of the standard car modifications include;

  • Stereo systems, subwoofers, DVD or CD players
  • Phone mount, Wi-Fi, or Bluetooth connectivity
  • Changes to the engine, body, suspension, or exhaust
  • Turbochargers or turbo boosters
  • Custom wheels
  • Chrome rims or bumpers
  • Custom paint jobs
  • Furniture
  • Carpeting or insulation
  • Winches
  • Anti-roll or anti-sway bars

What Is Modified Car Insurance?

When insuring your car, the car insurance company expects your car to be as good as new. This means it should be in the same original condition it was from the manufacturer.

If you have a modified car, things change. But, since the vehicle is yours, you can do whatever you want to it: get massive tires, paint a dragon on the door, or raise or lower the chassis.

modified hot rod

However, you will need to notify your insurance provider of the modification. This is because insurers categorize modified vehicles as non-standard vehicles.

In insurance, modified (non-standard) cars have higher insurance premiums.


To understand modified car insurance, you need to understand car insurance in detail.

Car insurance has different coverage types, which offer different kinds of protection.

The standard parts/types of a typical car insurance policy include:

Bodily Injury Liability

This policy pays for medical bills when you injure someone in an accident

Property damage liability

Pays the cost of property damage you caused in an accident

Personal Injury Protection

Pays your medical expenses and of your passengers, if you are involved in an accident

Uninsured/Underinsured Motorist

Covers the costs when you are involved in an accident caused by a driver with no or little car insurance


Covers damage to your car, which occurs when you are not driving


Covers damage to your car after a car accident, no matter who was at fault

Here is a point to note.

Your basic/typical car insurance policy will not cover the modifications on your car. For example, comprehensive and collision insurance will cover your car’s damage, and everything else listed on your coverage, but not damages to any modifications on your car.

This is the reason why if your car has modifications, you will need to purchase additional special coverage for the changes.

Does Car Modifications Raise Your Car Insurance?

The simple answer is yes. Car modifications will raise your car insurance.

Since you will need to purchase additional special coverage for the modifications, your coverage rates will go higher.

Any additional item on your car policy will likely raise your premium’s cost.

custom car interior with audio system and lcd display

What happens is that the insurers will use the manufacturer’s factory specifications to calculate your initial car insurance policy. After that, the insurer will offer you special coverage for all the aftermarket modifications, sometimes known as “custom parts and equipment coverage.”

The special coverage covers potential repair costs or replacements of the customizations if or when they get damaged, since the parts are often unique and, sometimes, more expensive.

Naturally, some modifications will not need any extra coverage, for instance, a $15 phone mount. The additional special coverage often applies to changes that are often expensive and difficult to pay for using out of pocket, for example, a turbo or stereo system.

But why the price increase for the premium?

Insurance companies have unanimously concluded that cars with modifications are high risk, and the drivers are more likely to file a claim. There are high-risk cars because of the following reasons:

  • The modifications and addition of high-cost equipment increase the likelihood of theft. Cars that stand out are more attractive to burglars or thieves.
  • Increasing car performance increases the potential for an accident and decreases safety.

As a result, the special coverage will be high to increase the chances of protection.

Why Do You Need Modified Car Insurance?

In the event of an accident, you will need the whole of your car to be covered, including the modifications. This need makes modified car insurance a vital necessity.

An insurance agent talking to a frustrated woman driver by the car on the road after an accident.

If you get involved in a crash without informing your insurer of your car’s modifications, your car modifications will not be covered. It is that simple.

Worse yet, withholding this information from your insurer risks invalidating your policy altogether. With an invalidated policy, you risk being personally liable for damages if you are in an at-fault accident.

You thus need to have these changes/modifications noted but your insurers and adequately covered. You will be covered, and you can claim.

What About Car Modification Discounts?

Not all car modifications increase your premium rates.

Some car modifications can potentially lower your premium rates if the additional item or equipment aims to increase your car’s security and safety and security.

Such customizations are deemed to lower your car’s risk.

You also need to contact your car insurer after making these customizations, to find out about lowering your rates and the number of discounts available for security modifications. The modifications that have discounts include:

  • Rearview cameras: helps you see what’s behind.
  • Blind-spot detectors.
  • Accident-sensor technology.
  • Anti-theft systems: such as alarms, LoJack, GPS tracking devices, or OnStar service.
  • Daytime running lamps/lights: increases your car’s daytime visibility, and has adaptive headlights that enhance night vision.
  • Modified seat belts.
  • Airbags.

However, you need to note that although seemingly counterintuitive, safety tech features do not automatically earn you a discount. They may greatly reduce your risk of getting involved in an accident, but that doesn’t guarantee a discount.


Some of the high tech safety features can potentially raise your premium rates since they may be expensive to repair or replace.

Close up details of car engine. Modification of the engine

As a result, it is always essential to check with your insurer before you make any modifications to your car.

Bottom Line

Car modifications will cost you time, money, and could also potentially increase the value of your car premiums.

Whether your car modification is a necessity, or for aesthetic or performance reasons, you need to consider how it will impact your insurance coverage.

You can speak to your insurance contact or company about the modifications to be sure about the premium costs.