Will My Insurance Company Raise My Rates If I Make Modifications to My Vehicle?
Personalizing a vehicle through custom modifications is a dream for many car owners, enthusiasts, and hobbyists. Whether you’re enhancing performance or altering the aesthetics, customizing your car can make it stand out. However, it’s crucial to understand how these changes may affect your insurance. That’s where modified car insurance comes into play – a specialized policy designed to protect the unique features and added value of custom vehicles. Our team of car accident lawyers at Doehrman Buba Ring put together a guide below about how car modifications may impact your insurance premium to help readers understand potential costs, savings and risks.
What is Modified Car Insurance?
Modified car insurance is a type of auto coverage tailored for vehicles that have been altered from their original manufacturer specifications offered by most insurance providers. The insurance provider may call it a custom premium, an altered premium, supplemental insurance or just a new policy. A modified car may result in higher insurance rates, but as you’ll see below, there are times it can help you save money.
These modifications can include performance upgrades, aesthetic enhancements, interior changes like a new seat or steering wheel, engine and light changes, and more. They are generally done to improve the car’s performance, it’s look, it’s safety or all of the above. Since standard policies are based on factory models, customized cars may require additional protection to account for their increased worth and potential risks. Depending on the modifications made, a car insurance premium can become more expensive or less expensive. Generally, if the modification is legal and results in enhanced safety, the insurance policy could come down in cost, helping you save money. If the modification is illegal or reduces the car’s safety, the insurance policy cost could increase. Your insurance agent will help you understand what to expect with your premium, so it’s best to ask how much coverage you may need based on your modification plan before you perform any mods.
Common Modifications That Impact an Insurance Policy
Engine Modifications
- Turbochargers
- Engine swaps
- Cold air in-take
- High flow catalytic converter
- Performance exhaust system
Aesthetic Modifications
- Custom paint job
- Body kits like the hood, grill or side mirrors
- Aftermarket wheels
- Suspension / hydraulic modifications
Interior Modifications
- Custom leather
- Sound systems like a subwoofer or additional speakers
- Dashboard setups
Safety/Tech Upgrades
- Advanced brakes
- Additional airbags
- GPS systems
- Enhanced alarm or security features
The Top 11 Most Common Car Modifications
According to How Stuff Works, here are the most common legal and illegal car modifications that owners make.
Legal car modifications
- Suspension – Suspension mods can help the car handle better, including enhancing the springs, shocks and steering assembly. Suspension mods can also mean hydraulic installation. Safe suspension modifications are legal, but hydraulic suspension changes are likely to either skyrocket your insurance cost or void your insurance coverage altogether.
- Turbocharger – Not to be confused with nitrous oxide, a turbocharger is legal so long as it passes the state emissions test.
- Seats – Seats can be upgraded to match sport or racing seats, or even just more comfortable or luxurious seats, as long as the factory seatbelt and airbags are not impeded.
- Paint Jobs – You can paint or wrap your car as long as it doesn’t look like it’s intended to resemble police, law enforcement or other government vehicles.
- Window Tint – This modification is very specific to the state where the car is registered. In Indiana, the law states non-reflective tint can be applied to the top of the windshield above the AS-1 line from the manufacturer. Front side windows, back side windows and rear window must allow more than 30% of light to pass through. Reflective tint on front side and back side windows can’t reflect more than 25%.
- Lights – Again, these modifications can vary by state. In Indiana, the law states:
- Two fog lights are permitted that do not point more than 4 inches above the position of the lamp at 25 feet away.
- Two spotlights are permitted that do not illuminate for more than 100 feet ahead of the vehicle.
- Fender or cowl lamps are limited to two white or amber lights.
- One running board lamp in amber or white is permitted on each side of the vehicle.
- Flashing hazard lights in the rear must be amber or red.
Illegal Car Modifications
- Nitrous Oxide – This illegal mod temporarily adds more oxygen to the engine, which burns fuel quicker and delivers more power. It’s seen in a lot of car racing movies.
- Underbody Neon Lights – This one varies by state and even light color. In some states, it’s illegal to have red or blue lights because they could be confused for police lights. Research the Indiana law clearly or speak to a reputable, experienced mechanic for clarification.
- Racing Harness – A racing harness interferes with a car’s factory seatbelt and is therefore illegal. It can also lead to challenges for first responders if they need to extract a driver wearing a harness from a crash.
- Altering Emissions or Catalytic Converter – If for some reason you are updating your exhaust system, you need to leave the catalytic converter in place. Any change to emissions is illegal.
- Excessive Height Adjustments – This one varies by state as well. In Indiana;
- Vehicles cannot exceed 13 feet, 6 inches in height.
- The bumper cannot be higher than 30 inches off the ground.
Always check with an expert mechanic, your local and state laws, and your insurance company before making any custom modifications to your vehicle.
Why Standard Policies Fall Short
Off-the-lot car insurance typically doesn’t cover the value of aftermarket parts, the higher accident risks of performance mods, or the costs to replace custom bodywork. This leaves modified car owners vulnerable to significant out-of-pocket expenses if disaster strikes and the modification is damaged and requires replacement or serious labor time.
Key Coverage Options
- Agreed Value Coverage: Insurer and owner agree on the full value of the vehicle, including the value of the modifications made
- Replacement Cost for Mods: Covers the expense of replacing custom parts if damaged or stolen
- Third-Party Liability: Protects against damage or injuries caused by the modified vehicle
- Agreed Mileage Restrictions: Potential premium discounts for limited-use cars
How Modifications Impact Premiums
Insurers evaluate the specific risks posed by each customization to determine premiums. Generally, performance upgrades and expensive aesthetic changes drive up costs more than safety/tech enhancements. Frequency of use is also a factor.
If I Modify My Car, Will I Lose My Insurance Coverage?
The short answer is it depends. Insurance rates for modified cars depend on factors listed below and your local and state laws. You can lose, void, or negate your insurance coverage if you make modifications and don’t disclose them to your insurance provider or agent. You can lose your coverage if you perform a modification that is explicitly prohibited by law, such as raising the car too high or putting too many lights on the exterior, or the wrong color lights. If the modification leads to a higher-risk vehicle, it’s likely to increase your insurance rate.
Factors That Affect Premiums:
- Type of Modification (performance vs. aesthetic)
- Value of Modifications
- Frequency of Vehicle Use
- Driver’s Age and Driving History
Finding the Right Modified Car Insurance
When shopping for coverage, it’s crucial to be upfront about all customizations and compare offerings from different insurers. Providers specializing in modified vehicles may offer more comprehensive policies at competitive rates.
Tips for Finding the Best Policy:
- Disclose All Modifications
- Ask About Available Discounts
- Shop Around for Multiple Quotes
- Consider Specialty Insurers
Regulatory Considerations
It’s important to ensure any modifications comply with local laws. Non-compliant changes could lead to policy cancellation or legal issues if the vehicle is involved in an accident or inspected.
Protect Your Modified Car
For the automotive enthusiast who’s poured their passion into a one-of-a-kind ride, modified car insurance is an essential investment. By securing the right coverage, you can have peace of mind knowing your custom vehicle – and your financial investment – is properly protected.
What You Need to Know if You Add Custom Mods to Your Car
Modified car insurance is an essential consideration for anyone who has altered their vehicle beyond factory specifications. To get an accurate insurance premium, the first step is determining the value of the modified car, then shop around for a policy. Don’t be discouraged if the premiums are more expensive, the policy needs to cover more potential expenses and potential risk, especially if the mods are made to make the car faster or more powerful. By understanding the impact of modifications on your coverage and securing a policy that accounts for these changes, you can protect your custom car and ensure it’s insured for its true value.
If you Need a Car Accident or Motorcycle Accident Attorney
If you have ever been the victim of in a car or motorcycle accident, contact Doehrman Buba Ring today for your free consultation. Consulting a legal expert can help you navigate the complexities of your case and obtain the justice and fairness you deserve. An experience, professional attorney can assist with claims related to your medical expenses and bills, lost wages from work, and other damages resulting from the accident. Contact us when you need a car accident lawyer if you are injured and seeking a claim.
