Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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UPDATED: Oct 15, 2021

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Here's what you need to know...

  • Making modifications to your car can result in an increase in premiums.
  • It pays to be aware of what effect the mods will have on your policy before you make the changes.
  • You have a responsibility to report any changes made to your car immediately upon doing so. Failing to report such changes is considered fraud.

Many people enjoy souping up their cars with various colors, spoilers, or add-ons that enhance its looks. Young men, especially, like to “ramp up” their motors, raise or lower their car height, or add various features that help improve how it looks or functions.

The problem with these types of modification is that it also creates modifications in your car insurance policy and premium. Depending upon the degree of change you made to your vehicle, you could have car insurance premiums may raise substantially.

Before you make those changes, make sure and compare different auto insurance policies to guarantee that you get the best deal. Enter your zip code in our FREE comparison tool to get started!

What is a modified car?

A modified car is a vehicle that’s customized with unique bodywork, functional upgrades, or improved performance. These modifications change the way an insurance provider values your car and can also invite theft.

If you modify your windows, install a pinstripe decal, or add a hitch, you should tell your auto insurance company about your modified vehicle. This way they can appropriately update your auto policy to include the changes.

Because of these changes, you may be asked to insure your vehicle for more than you would without such changes. When shopping for insurance, if you plan to modify your car, you should definitely inquire about this.

Different insurance carriers handle vehicle modification differently. That’s why it’s best to discuss any potential upgrades with your insurance agent so that they can tell you whether your current policy covers the changes or if you need to check other car insurance companies as an alternative.

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What is a car insurance modification?

A car insurance modification is a change that is made to your current auto insurance policy as a direct result of any modifications that you made to your car. Some modifications may require that you add an anti-theft device to your car or to add more property damage insurance.

Fraud Warning for Car Insurance Modifications

Fraud is defined as any conscious attempt to represent something in one way that is not consistent with the truth or to withhold any information that results in some monetary gain as a result of the false or misleading information.

In the case of car modifications, it is considered fraud if you make modifications to your vehicle and fail to report such changes to your car insurance company.

This can carry stiff fines and penalties, including criminal charges if convicted.

Why insurance companies increase premiums for modifications?

There are a number of reasons why car insurance companies may raise your premiums or even drop your auto insurance coverage if you make modifications to your car.

Below are some of the common reasons why they may do this based on changes you make to your auto insurance policy:

  • Modifications may cause your car to run differently, thereby increasing the risk of accident.
  • It may increase the chances of theft or destruction of property.
  • Modifications may cause problems in the maintenance of your car or increase the upkeep requirements.
  • Some modifications may be dangerous.

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How to compare insurance policies?

When shopping for car insurance and comparing policies, you will want to keep these things in mind, especially if you plan on making any type of changes or alterations in your car’s engine, body, appearance, or other areas.

Being honest with your insurance company is required by law to avoid fraud in the event of making any changes to your car.

What if any insurance company drops you?

Insurance companies will not automatically cover modifications you make to your car. Standard auto insurance policies only cover the original equipment included by your manufacturer. This applies if you have collision or comprehensive coverage.

If a car insurance company drops you as a result of modifications you have made to your car, here are some of the options you may have:

  • Call your auto insurer and tell them about the changes and ask them how it will impact your policy.
  • Explain why you failed to report the changes before and apologize for the oversight.
  • Compare insurance plans to see if you can get a better deal elsewhere.
  • Once you get reinstated (if you do), make sure you report any changes in the future that you make to your car.
  • Carefully consider any modifications and ask an agent how it will impact your insurance costs.

What are some car insurance tips for drivers?

These practical tips on car insurance will help you make a decision on the type of car insurance you might need, especially if you plan to make any modifications to your car in the near future that could impact your insurance premiums.

  • Look for companies that offer policies with additional property damage and theft coverage.
  • Ask a representative of the insurance company you are considering to explain what will happen with car insurance modifications.
  • Do some side-by-side comparisons of the policies and companies you are considering to see the main aspects of each.
  • Ask an agent to clarify any points that are unclear to you.
  • Ask about exclusions and limitations. These are the things that insurance policies do not cover and this may apply to modifications.
  • Read up on the fine points of the law regarding insurance modifications to see how it applies to you.

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What car modifications will increase our premiums?

These car modifications often cause premiums to increase. In some cases, your insurance could even be dropped if your insurer discovers that you made the modifications without telling them.

  • Nitrous oxide injection systems – Adding an injection system may increase your probability for a moving violation or accident. Car insurance companies tend to take a low view of these modifications, which will usually result in high monthly premiums.
  • Extreme alterations to engine system – Any other extreme changes to your car’s engine system or fuel line, such as extra exhaust or enhancements, will also result in higher premiums.
  • Flamboyant paint jobs or enhancements on the body – Extreme changes in appearance may draw too much attention to your car and invite theft. As a result, these types of changes are highly discouraged if you are wanting to avoid inflated insurance costs.
  • Failure to follow proper mechanical procedures – Any modifications to your fuel or engine mechanics that increase speed potential, may result in premiums going up. Some modifications may not be legal and this poses an especially high risk — not only for your insurance but for you legally

How to keep your driving record clean?

Finally, pay close attention to your driving record. Driving responsibly and proving your good driving record by avoiding DUI’s and traffic violations goes a long way toward keeping your insurance premiums as low as possible — even with modifications to your car.

Even if you make some of these modifications to your car, the resulting premiums may not be as high, as long as you are honest about the changes you made and keep your driving record clean.

When you are shopping for car insurance, the best thing you can do is have an understanding of the various policies of that company. By asking the right questions, you may be able to find out which company would be best if you plan to make any sort of modifications.

Even if you do not plan to make such changes, you need to know exactly what is allowed on your policy and how much your premiums could fluctuate, given certain circumstances that come up from time to time in the real world.

If you do not understand the potential result of changes that you make in your policy, check around with various car insurance sites and find out what a certain change will do to your personal auto policy.

If you are determined to make the modifications to your car, find out what it will mean in terms of your premiums and then plan your budget accordingly.

As long as your modifications are legal and you can afford the increase in premiums, go ahead and soup it up. But be careful out there!

Start comparison shopping for the right coverage at the right cost. Enter your zip code in our FREE tool to get started!