Car insurance may sometimes seem like a mystery. Your premium is determined based on a variety of factors, including: the type of car you drive, your personal driving record and where you live.
As one of the most important factors is the type of car you drive, it should come as no surprise that your insurance company is quite interested if you modify your car. So, it’s very important to contact your broker or your insurance provider before you make any modifications to your vehicle.
If you’ve made a modification to your car without consulting with a broker or informing your insurance company, it’s possible that these modifications will impact your insurance policy and you may actually be driving uninsured.
Before hitting the road, stick around and learn more about car insurance specifically designed for your modified vehicle.
The Pros and Cons of Modifying Your Car
Customizing a car is an alluring prospect for anyone who wants to stand out in the crowd. Modifications can range from aesthetic changes, such as body kits, to performance enhancers, such as turbochargers. When expertly handled, some modifications can enhance the performance and market value of the vehicle.
Even when carried out by experts, performance modifications may void the warranty of your engine and could land you in legal trouble. Some mods, such as nitrous injection kits, are illegal in Canada. In some provinces, officers can pull a modified vehicle off the road if they doubt its roadworthiness and safety. If they do, they will ask for a certificate of inspection covering the modification.
Mods can also cause malfunctions in the vehicle and damage parts, which can ruin your vehicle or cause an accident. Based on the nature of the ‘cons’, there may either be no vehicle insurance coverage or premiums may be very high. If the modifications are done without your insurance company’s knowledge, it may be considered a violation of the policy conditions, and any claims you make may be denied.
Before having any customizations done to your vehicle, think hard about what you stand to gain and lose, and have a discussion with your insurance broker.
Why vehicle modifications impact insurance
There are two key reasons why modifying your vehicle can impact your auto insurance:
- It can affect the safety and performance of your car
- It can affect the overall value of your vehicle
When applying for insurance, you are required to provide details about the make and model of your vehicle. This information helps the insurance provider determine your coverage price.
Any modifications will impact the insurance company’s appraisal of your vehicle, which can influence your insurance policy. In some cases, the effect might be to increase your insurance premiums, but in the worst-case scenario, it could mean termination of your insurance policy.
Modifications impacting vehicle safety
If you plan to make any modifications to your vehicle to change how it performs, it’s vital to contact your insurance broker beforehand to understand how this could impact your policy. Changes that might impact performance and safety include:
- Modifications to the engine
- Modifications to the car suspension
- Modifications to the brakes or braking system
- Modifications to the vehicle’s transmission
- Increasing or decreasing the tire size
- Tinting the windows
Modifications such as lowering the suspension and altering the size and/or power of the engine are considered to increase the risk of the vehicle being in an accident. Most of the modifications listed will require you to seek a new insurance policy with an insurance provider that is willing to insure a modified vehicle – hence the need to speak with your insurance broker.
Modifications impacting the vehicle’s value
Unless explicitly stated in the policy, most standard auto insurance policies either do not cover aftermarket parts or only offer minor coverage for certain aftermarket modifications. This means that if you want to add a feature to your vehicle to increase its value -- such as an expensive aftermarket stereo, special exhaust system, custom paint job or fancy rims -- these additions may not be covered under your insurance policy and in some cases, they may even void your insurance policy.
If you’re planning to modify your car with aftermarket parts and want them to be covered, you may need to look for a new policy. Contact your insurance broker to discuss the details and find out what coverage is available for vehicles with the types of modifications you want to make.
Always notify your insurance broker about modifications
When modifying your vehicle or purchasing a modified vehicle, it’s imperative that you inform your insurance broker and the insurance provider about the modifications.
This is a responsibility placed entirely on you; it’s not the duty of the insurance provider to inquire about or investigate modifications.
If you are in an accident in your vehicle and later it is determined by the insurance company that your vehicle was modified and you failed to inform them, your insurance claim could be denied, and your policy could be revoked, leaving you liable for the damages and the cost of the accident.
For customized vehicles with extensive modifications, it may be necessary to look for an insurance provider that offers specialized insurance coverage for modified vehicles, as standard insurance coverage will not cover the vehicle.
Car insurance for modified vehicles in Canada
Regardless of whether you've made upgrades to your car, having custom car insurance tailored to your unique needs as a driver and car modifications is essential to keeping you safe while behind the wheel. To ensure you're sufficiently able to protect yourself in the event of a collision or other insured loss, make sure you have the following policies in place:
How can I save on modified car insurance?
While driving modified vehicles can affect how much you pay for coverage, there are still a couple of methods you can use that could potentially help you save on some costs. When purchasing your coverage, keep the following tips in mind:
Bundle your policies
If by chance you already have another type of coverage in place, for example, pet insurance or home insurance, you can bundle your coverage for your modified cars with your existing coverage. Insurance providers often provide a bit of a discount to customers who have more than one type of policy with them.
Ask about discounts
Drivers, regardless of whether they have modified cars or not, can still qualify for certain discounts. Whether it be for replacing their tires in the winter or installing security features, there are, in fact, numerous savings you may be eligible for. So, don't hesitate to ask about these so you can cut down on your expenses.
Increase your deductible
While car modifications will likely require a higher deductible regardless, you may still be able to get a bit of a discount by increasing your deductible amount even further. Remember, the deductible is the amount you agree to pay at the time you file a claim. So, make sure that you are able to comfortably afford a deductible increase before doing this.
Pay for your coverage upfront
Drivers can also get a bit of a discount when paying for their insurance upfront rather than monthly. Insurance providers typically add a fee to those who pay monthly, as they need to process payments throughout the year. However, by paying for your policy in one go, you can remove these fees.
Want to know more about auto insurance? Contact BrokerLink
If your car is your pride and joy, and you want to make her even prettier than she already is, that’s wonderful - just make sure you will still have the right coverage in place in the event of an accident.
A BrokerLink broker can help! Before you make any changes to your vehicle, give us a call. We’ll help you figure out what you can do and how it will impact your coverage so you can drive with peace of mind, knowing you and your car have the protection you need. We can also help you potentially save on car insurance while crafting your custom car insurance!
With locations across Canada, there's a chance we're in your neighbourhood! Come visit us in person to work with a broker one-on-one! If you can't make it in, give us a call any time to speak with someone over the phone.
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Modified Car Insurance FAQs
Are modified cars more expensive to insure?
In most cases, yes, but it depends on the modifications and the insurance company. Many companies will not cover any aftermarket parts, but you may be able to find coverage through specialized insurance companies. Before making any aftermarket additions or changes to your vehicles, contact an insurance broker to learn more about getting a modified car insurance policy.
What types of modifications are likely to increase car insurance premiums?
There are many, for example, lowering the suspension or altering the size and power of the engine generally increase the risks of a car accident. So, these are the types of modifications that are most likely to escalate your insurance premiums.
What happens if you get into an accident with a modified car?
If you are in a car accident and the insurance company finds out that you modified your vehicle without informing them after the fact, your claim could be denied, and your insurance policy could be cancelled, leaving you liable for the damages and cost of the accident. To prevent collisions, brush up on safe driving tips and follow the rules of the road.
Will being a young driver affect my insurance premium?
Young drivers can anticipate paying more for their insurance regardless of whether they drive vehicles with modified parts such as alloy wheels, a body kit, or other components, given their lack of experience. These modifications, in addition to the standard rate for young drivers insurance, could yield higher rates, which you'll need to take into account at the time you purchase coverage. The best thing you can do in this scenario is work with a broker and shop around for different quotes from various providers. That way, you can compare coverages and costs before selecting one that best fits your needs and budget. Just remember that the cheapest option out there isn't always the best. Make sure you find a happy medium between affordability and protection.
Does modifying my car for accessibility impact my coverage?
So, does modifying a vehicle for accessibility impact your coverage? Essentially, vehicle mods are defined as anything that alters the way a vehicle drives, whether it be internally or externally. As such, if you make changes to your car in order to make it more accessible to your needs, there is a chance that your provider will take this into account while calculating your insurance costs. In this scenario, we recommend that you reach out to your provider directly for more information about purchasing custom coverage for your vehicle. Additionally, if costs are a concern, you may be able to qualify for provincial grants that can help pay for accessibility modifications to your vehicles and your home.
What is the best car for students?
The best cars for students really depend on your unique needs as a driver. That being said, because students and young drivers, in general, are more of a risk while on the road, purchasing cars that are reliable and inexpensive to repair is probably your best bet, rather than driving a car that has an after-market modification. Again, this is completely up to you. We recommend speaking with your parents or guardians and an insurer for more information on what you can expect to pay.
If you have any questions, contact one of our local branches.
