The Impact of Car Modifications on Your Insurance
Have you ever thought about making your car look cooler or go faster? Many car owners love to change things on their vehicles to make them stand out or perform better. These changes are called “modifications” or “mods” for short.
But did you know that car modifications affect your car insurance? In fact, not telling your insurance company about these changes is the number one reason insurance claims get rejected in the UK! According to Driving.org, £47 million worth of claims were rejected in just half a year in 2021, with 16% of these denials happening because people didn’t declare their vehicle modifications.
Let’s look at how car modifications insurance requirements work and what you need to know before modifying your pride and joy.
What Counts as a Car Modification?
A car modification is any change you make to your vehicle that makes it different from how it was originally built by the manufacturer. This includes both changes you can see and changes to how the car works.
Types of Car Modifications
Car modifications usually fall into these main groups:
Cosmetic modifications: These change how your car looks.
- Custom paint jobs
- Decals and stickers
- Tinted windows
- Body kits (parts that change how your car looks)
Performance modifications: These change how your car drives.
- Engine tuning (making the engine more powerful)
- New exhaust systems
- Changes to the suspension
- Transmission modifications
Safety and security modifications: These make your car safer.
- Parking sensors
- Dash cams
- Alarms and immobilisers
- Tracking devices
Interior modifications: These change the inside of your car.
- Custom seats
- New entertainment systems
- Different controls
How Modifications Affect Your Insurance Costs
When you modify your car, your car insurance costs almost always change too. Research shows that modifications increase insurance premiums by 81% on average!
Different modifications lead to higher premiums in different ways:
| Modification Type | Average Premium Increase |
|---|---|
| Performance modifications | Up to 153% |
| Interior mods | 96% |
| Visual/cosmetic mods | 89% |
| Air conditioning | 25% |
Even the types of car matter. For example, modified Volkswagen Polos see insurance increases of 134%, while Ford Kugas only increase by about 36%.
Why Do Modifications Increase Insurance Costs?
Motor insurance providers see modifications as creating higher risks in several ways:
- Higher value – Modified cars often cost more to repair or replace
- Risk of theft – Flashy mods might attract thieves
- Increased accident risk – Performance modifications can make the car more powerful and potentially more dangerous
- Specialist repairs – Modified cars often need special parts or expertise to fix
The Legal Side: You MUST Declare All Modifications
The most important thing to know is that you legally must tell your insurance company about ANY modification to your car. The Financial Ombudsman Service emphasizes that “it’s crucial owners inform insurers of any modifications, even if they were made before the car was purchased.” This is true whether you:
- Make the changes yourself
- Buy a car that already has modifications
- Have temporary or annual insurance
What Happens If You Don’t Tell Your Insurer?
The consequences of not declaring modifications can be severe:
- Your insurance could be cancelled – Your insurer might void your car insurance cover completely
- Claims can be rejected – If you need to make a claim, it could be denied
- Legal problems – Driving without valid insurance is against the law and can lead to fines, points on your licence, or even having your car taken away
Never try to hide modifications from your insurance provider. One driver reported to the Financial Ombudsman Service only discovered their policy was void after their car was stolen, as they hadn’t informed their provider about modifications.
Which Modifications Affect Your Insurance the Most?
Modifications That Usually Increase Your Premium
These changes almost always make your car insurance costs go up:
Engine and performance enhancements: Making your car faster or more powerful is seen as increasing the risk of accidents.
Body modifications: Custom paintwork, body kits, and spoilers make your car more expensive to repair and might attract thieves.
Alloy wheels: Non-standard alloy wheels can be costly to replace and attractive to thieves.
Entertainment upgrades: Expensive sound systems increase your car’s value and risk of theft.
Modifications That Might Decrease Premiums
Some changes could actually help lower your higher premium:
Security enhancements: Adding alarms, immobilisers, or tracking devices can reduce theft risk.
Safety features: Parking sensors, reversing cameras, and driver assistance systems might lower accident risk.
Top Tips for Car Enthusiasts
If you love modifying your car but don’t want insurance headaches, follow these tips:
- Contact your insurer first – Before making any changes, talk to your insurance provider to understand how they’ll affect your coverage and costs.
- Declare everything – Tell your insurer about all modifications, even small ones, as soon as they’re installed.
- Consider specialist insurers – Some insurance companies, like Trident Insurance, specialise in covering modified vehicles and might offer better rates.
- Keep records – Save all receipts, specifications, and certificates for your modifications.
- Read your policy carefully – Make sure you understand any conditions related to modifications in your insurance documents.
Real Stories: When Modifications Cause Problems
The Financial Ombudsman Service reports seeing many cases where car owners face serious consequences due to undeclared modifications:
- One driver only discovered their policy was void after their car was stolen, as they hadn’t told their insurer about modifications
- Another customer faced a claim denial after an accident because their car had modifications made by the previous owner that they didn’t know about
As Rachel Lam from the Financial Ombudsman Service explains: “For many people a car is their pride and joy, and it’s understandable that they may want to modify or personalise their vehicle. But these changes can have huge repercussions – increasing premiums, invalidating insurance, or leaving unsuspecting car owners thousands of pounds worse off.”
Finding the Right Insurance for Modified Cars
If you have a modified car or are planning modifications, it’s worth looking for insurance specifically designed for your needs:
- Trident’s Car Insurance offers various levels of cover to insure vehicles with modifications
- For those who modify cars as part of their business, Motor Trade Road Risk Insurance might be the appropriate choice
Interesting Stats About Modifications and Insurance
One in eight UK motorists (12%) had to pay for vehicle repairs or replacements themselves after having claims denied. This number rises to 33% among drivers aged 18-34, possibly because younger drivers are more likely to modify their vehicles without telling their insurers.
After undeclared modifications (16%), other common reasons insurance claims get rejected include:
- Parking in non-specified locations (15%)
- “Fronting” (pretending someone else is the main driver) (14%)
- Using a car for business on a personal policy (14%)
- Issues with driving speed or blocked windows (13% each)
Frequently Asked Questions
What counts as a modification for insurance purposes?
Any change that makes your car different from how it left the factory counts as a modification. This includes both visual changes like paint jobs and performance changes like engine tuning.
Do I need to declare modifications made by the previous owner?
Yes! Even if you didn’t make the changes yourself, you must tell your insurer about any modifications already on the car when you bought it.
Will all modifications increase my insurance premium?
Not necessarily. While most modifications (especially performance ones) will increase costs, some security features might actually help reduce your higher premium.
If I remove a modification, will my premium go back down?
You should inform your insurer if you remove modifications. They may adjust your premium, but it depends on their policies and other factors affecting your car insurance costs.
Conclusion
Car modifications can be a great way to personalise your vehicle and make it truly yours. However, it’s crucial to understand how these changes affect your insurance.
Always be open and honest with your insurance company about any modifications. While some changes will increase your premiums, the cost of not declaring them could be much higher if your policy is invalidated when you need it most.
Before making any changes to your vehicle, contact your insurer or talk to insurance specialists like Trident Insurance who understand how car modifications insurance works and can help you find the right coverage for your unique car.