If you drive a popular, relatively standard model of car then it is usually quite easy to find a good deal on your insurance. Price comparison sites are made for you, and insurers understand your risk profile, so they know what to charge you.
Insurance companies want the business of the average person, driving a fairly standard car because it is unlikely that such a vehicle will be stolen or vandalized, and the average driver is not likely to take risks that will cause a crash.
Modified cars are a different category of vehicle. While most owners of modified cars take pride and want to look after them, the fact remains that the cars are sometimes more potent than the average (hot rods and high-performance vehicles, for example). They also stand out and are more likely to be a target for theft and joy rides.
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The sheer value of a classic car makes it an expensive proposition to ensure, and the increased risk profile for other types of modified or custom car can be a problem too.
Obtaining insurance for a custom car takes a bit more shopping around than getting coverage for a more standard model since the insurance company will want to know more about the vehicle. You may find that it is easier to get a good deal if you look for a custom car specialist instead of calling the mainstream insurers.
Each insurance company has their policies and may take into account different factors with different weightings when setting prices. Here, we will discuss some of the critical issues you should consider when trying to find a policy and how you might be able to get a better deal.
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Can You Get Insurance for a Modified Car?
It is possible to get coverage for modified and custom cars, exotic cars, and other unusual vehicles. It is not only possible, but it is also mandatory to have insurance in almost all of the United States. At the time of writing, the only state that does not have a legal requirement for drivers of motor vehicles to be insured is New Hampshire.
In New Hampshire, motorists are required to prove that they are financially responsible. In effect, this means that you either need substantial savings to cover the cost of any potential accident or injury, or you need insurance to cover such events.
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Most insurance companies will cover customs, high-performance cars, and cars with extensive modifications; however, the premiums they charge could be quite high. Finding a specialist insurer is likely to get you a much better deal.
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Will Your Insurance Increase if You Modify Your Car?
If you already have a car and it is insured, and then you modify that vehicle, it is highly likely that your insurance premiums will increase. The amount of rising depends on the size and type of modification.
You are required to inform the insurance company if you make any significant modifications to your car. Let’s take a look at some of the most common changes and how they might change your premiums:
- Body Modifications: Major changes to bodywork could increase premiums by 10 to 15%
- Engine Control Unit: An ECU on an aged, inefficient vehicle could decrease the premium.
- Other Engine Changes: Other engine upgrades may cause your premium to increase by 5% or more
- Exhaust modifications: Tread carefully with exhaust modifications, since many popular mods are illegal in some states and may invalidate your cover
- Alloys or suspension: Small mods may have no impact on your premium, but this varies from insurer to insurer
- Breaks: Braking improvements could slightly reduce the cost of your insurance depending on the overall performance of the vehicle
- Short-shift kits: Breaking kits could increase the price of your insurance by up to 15%, but this depends on what other mods are already on the vehicle
Remember that insurance companies look at the overall risk of the vehicle, not just individual modifications. Insurers that specialize in modified cars understand what each change is.
This means that if you go to a mainstream insurer and say that you have a mass market car with break mods, you may pay extra even if the mods make the breaks safer.
If, on the other hand, you go to a specialist and say that you have a high-performance car but then cite several modifications which improve safety, you could save money.
What is Considered a Car Modification?
Car modification is any change that is made to a car which makes it significantly different from the original specification. Car modifications can increase insurance cost if the change increases the risk of theft or boosts the risk of the car being in an accident.
Small changes such as a paint job or replacing the alloys may not change the cost of insurance, although that depends on the color or the value of the replacements. Expensive interior work could increase the cost of your insurance because it makes the car a higher target for theft.
Even modifications for wheelchair accessibility could increase the cost of your insurance. Fuel efficiency upgrades may reduce cost.
It is vital that you disclose all modifications to your insurer.
How Can You Keep The Cost of Insurance to a Minimum?
Insurance companies work on several criteria when they are calculating premiums, including:
- How long you have been driving and your claims history.
- Where you live.
- How much your car costs.
- The type of car and any modifications to it.
- The purpose of the vehicle (work use or personal use).
- Security features.
- Where the car is usually parked.
While some of the factors that insurance companies use are outside of your control, others are things that you can change. You could save a lot of money if you invested in proper security measures for your car (burglar alarm, trackers, immobilizers), and you also park the vehicle off-street.
Young people can sometimes benefit from an insurance policy that is linked to their grades at college (some providers reward students who keep good grades), but it is generally costly for a young person to drive a classic or custom car.
You may be able to have a ‘black box’ installed in your car and have your driving habits monitored. A lot of companies will reduce premiums for people who can prove that they drive carefully.
If you are a delivery driver, or you drive a lot for work, consider using a company car for that, and having a separate policy for your vehicle, especially if your car is a high-priced one.
If you are a young, newly qualified driver, it may make financial sense to wait a couple of years before buying your dream car because insurance prices tend to fall dramatically when you have a long no claims history.
What Happens if You Fail to Disclose Modifications?
If you fail to inform the insurance company that there were modifications made to your vehicle, and they discover them later, then you could find that they reject any future claim you make. Should this happen then you may see it much harder to get insurance in the future.
If you are worried about how much a specific modification will affect your premium, call the insurance company before you get the work done and ask them how much it will change the cost of the policy. Alternatively, click here to compare quotes from some of the best auto insurance companies in the country.
You might get a pleasant surprise. If you do find out it is expensive, ask if there are precautions that you can take to reduce the cost. Insurance companies aren’t just out to charge you a lot of money. They want to make sure that your vehicle is covered adequately and they will often work with you to help you get a better quote.