Insurance for Modified Cars

Both modifying a car and buying insurance that covers a modified car can be expensive.

Not only that, but sometimes just finding car insurance that covers a modded or customized vehicle can be tough.

Why "can be"? Because most insurance companies consider any non-standard changes made to a vehicle to be modifications. That definition covers a lot of car mods—from custom paint jobs to chrome rims to turbochargers and more. Technically, even phone mounts count as car modifications.

Standard auto insurance policies rarely cover mods. For that, you often need to get special or supplemental coverage.

You'll learn more about the above in this article, plus you'll find answers to these questions:

• Will car modifications raise your insurance rates?
• Are there any car mods that won't raise your insurance rates?
• How much is modified car insurance?
• Which insurance companies are best for modified cars?
• Do you need to tell your insurance company about car modifications?

What kind of insurance covers modified cars?

If you want car insurance that covers modifications, you'll probably need to buy a classic or collector policy or add an endorsement or rider to a standard policy.

Standard insurance policies usually only cover a car's factory-installed equipment or parts.

Thankfully, many car insurance companies now sell supplemental coverage—in the form of riders or endorsements—that cover so-called aftermarket components.

Esurance, for example, offers customized parts and equipment coverage to its policyholders. It will pay up to $4,000 if any of the following mods are damaged, destroyed or stolen:

• Radios and stereos
• Scanners
• Navigation systems or satnavs
• TVs and video entertainment systems
• Custom paintings, murals, decals or other graphics
• Custom grilles, louvers, side pipes or spoilers
• Custom wheels, tires or spinners
• Special carpeting or insulation
• Height-extending roofs
• Anti-roll or anti-sway bars
• Winches
• Body, engine, exhaust or suspension enhancers

If $4,000 isn't enough to cover the modifications you've made to your vehicle, don't despair. Contact companies that specialize in covering collector or classic autos. Many cover modified cars, too.

Keep in mind, though, that most classic and collector car insurance policies come with restrictions. Some don't let you drive your modified vehicle daily. Or they require you to keep it in a locked garage.

Something else you might have to deal with in this situation is an agreed value provision. It ensures you'll be reimbursed for an amount both you and your insurance company have agreed to if the vehicle is destroyed or stolen.

You'll probably only want to go this route if you've put a lot of money into your modified car, though. Agreed value car insurance policies often carry high premiums.

Do car modifications affect insurance rates?

You'll almost always pay a higher insurance rate for a modified car than you'd pay for a car that hasn't been customized in any way.

The main reason for that is insurance companies believe people who customize their vehicles are more likely to file a claim.

Why? For starters, certain modifications—like those that alter a vehicle's performance or looks—increase a driver's accident risk in the eyes of most insurers. Also, thieves and vandals tend to find modded cars more attractive than conventional ones.

Are there any car modifications that don't affect insurance rates?

Not all car mods will raise your insurance rate. In fact, some car mods will lower your insurance rate.

In general, the vehicle modifications that can save you money are ones that increase safety, security or both. Here are a few common examples:

• Accident sensors
• Airbags (if your car didn't come with them, or enough of them)
• Anti-lock brakes
• Anti-theft devices, such as alarms or tracking systems
• Daytime running lamps or lights
• Rearview cameras

Before you decide to add any of this equipment to your car, though, contact your insurance company. Make sure it'll actually cause your rate to go down or result in some other kind of discount.

On a related note, don't assume a particular mod or part will lower your car insurance premiums. Navigation systems and phone kits often result in the opposite because they're popular with thieves.

How much does modified car insurance cost?

Unfortunately, it's impossible to say just how much you'll pay to insure a modded vehicle. A number of factors determine the cost of modified car insurance coverage, including:

• The specific modifications you make to your car
• How much those mods cost or are worth
• How much those mods raise your accident or theft risk
• Where you buy your policy or supplemental coverage

And then there are other premium rate factors that play a role, too, like your age and where you live.

What are the best insurance companies for modified cars?

You have a lot of options whether you're looking to insure your modified vehicle with supplemental coverage or specialty coverage.

If you're looking to add a rider or endorsement to a standard auto insurance policy, ask the company that sold it to you if they offer such coverage.

And if they don't? Shop around. Most of the biggest and best car insurance companies cover modifications in some way or another.

If you're looking to buy classic or collector car insurance for your modified vehicle, start by contacting and getting a quote from one of the following:

• American Modern
• Condon Skelly
• Grundy
• Hagerty
• Infinity
• C. Taylor

Don't feel like you have to stick with specialty insurers, though. Companies like GEICO, State Farm and USAA also offer collector policies that should cover your customized car.

Do I need to tell my insurance company about modifications I make to my car?

Yes, you must tell your insurance provider about any and all modifications you make to your car.

If you don't, your insurer won't cover your car mods if they're damaged or stolen. Even worse, they may invalidate or cancel your policy for withholding such important information.

Don't just make this a one-time thing, either. Let your insurance company know whenever you customize or modify your vehicle.

Not only will it keep you in their good graces, but it'll also ensure any claims you file with them in the future will go as smoothly as possible.

What is a modified car?

Most insurance companies consider anything added to your car after it leaves the lot to be a customization or modification.

Here are some of the most common car modifications:

• Accent or auxiliary lights
• Anti-roll or anti-sway bars
• Custom paint jobs
• Custom rims, spoilers or grilles
• Phone mounts
• Lift kits
• Stereo systems or subwoofers
• Turbo boosters or turbochargers

Insurers consider additions and changes that help people with disabilities to be modifications, too. And they often charge higher premiums for them just like they charge higher premiums for the mods listed above.

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