How do car modifications impact insurance?

By HUB SmartCoverage Team on February 13th, 2018

We all remember the hit MTV show ‘Pimp my Ride’ - where motor enthusiasts added a little bit of personal flair to their car - but have you ever been inspired to add some personality to your car? According to the Speciality Equipment Market Association (SEMA) people spent a whopping $41 billion on specialist car parts in 2016.

Modifications can be a lot of fun, and in some cases can even boost the performance of your car, but you should be aware of the effect this could have on your insurance premium.

What is a car modification?

Car modification is a change to the vehicle that is different from its original factory specification and can improve performance, aesthetics or be purely functional. Vehicle modifications or customisations can be perfectly legal; however, any that deem your car not road safe will automatically become illegal and could land you in some serious trouble.

Some insurers consider your car to be modified when the chassis, body and frame are structurally modified, the car's performance is changed, or when the cost of a custom paint job exceeds several thousand dollars.

What risks do they pose?

There seem to be two main categories of risk that car modifications fall into - risk of accident and risk of theft.

Modifications that change the look and performance of your car are deemed a danger- including engine changes, sports seats and spoilers. For example: should you soup up your engine, this could signal to an insurer that you plan on driving at a faster speed, and run the risk of both dangerous driving and a collision.

Some additions, including the installation of a car phone or a satellite navigation system, could tempt potential thieves, thus increasing the chance your vehicle is broken into or stolen. Although, it can be argued that this one is a bit of a myth since figures from IBC show that new or modified cars still aren’t the most stolen in Canada.

On the other hand, many modifications are considered low risk by insurers. These include common customisations like tinted windows and alloy wheels.

How does this affect an insurance premium?

While modifications to your car can increase your premium, in some instances they can lower it too. Research by Moneysupermarket analysed information from 2.3 million modified vehicles and produced a guide revealing how much each modification could benefit or set you back.

Adding a turbo or supercharged engine could more than double your insurance premium, and even features such as custom paint jobs could see your insurance rise by 36%, with racing stripes and numbers being specifically highlighted as adding their own 22% increase.

However, if you want to invest in some modifications that will save you money and reduce your insurance premium in the long run then perhaps consider the addition of some parking sensors or a tow bar.

What if your insurance can’t cover modifications?

If your insurer can’t cover the renovations you have made to your car with a standard policy, there are other options available. You can opt for supplement coverage - an additional benefit some insurers provide to cover any modifications or aftermarket components. Alternatively, you can purchase insurance through a specialist provider who deals with classic and high-cost cars.


In any case, it is vital that you inform your insurer of any modification as soon as possible. Different companies have their own definition of what is classified as a modification, and how they are willing to work with each. It is best to check with your chosen insurer in advance to see how your policy will be affected. Alternatively, find an insurer who can accommodate your car's modifications. 

If you fail to notify your insurer this could result in your insurance being voided, or losing out on a large chunk of cash should you be involved in a collision.

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