Insuring a Modified Car

Insuring a Modified CarAs a car aficionado, it's often tempting to consider modifying your street car, but hold on a moment. Before you undertake such an endeavor, be sure to check with your insurance company. Why? Because even though insurance for modified vehicles is much easier to obtain than it used to be, the cost of your premium will still be determined by your risk profile, and while there are standard formulas for your gender, age, and income, the more unique your vehicle is, the more difficult it is to determine how risky it is to insure.

Generally speaking, insurers divide modified street cars into two categories.

Show cars tend to be kept in a locked garage at night, only driven extremely short distances, and are usually babied by their owners, who typically bring them to car shows and other similar activities. This means they're also much less likely to be stolen, or be involved in an accident. These cars may be covered by mainstream insurance as long as you have a non-modified "daily driver" as well, but it is often less expensive to consider specialty insurance.

Street racers on the other hand are high risk vehicles typically operated by "boy racers," who use and abuse them by driving them at high speeds, high RPMs, and with little caution. These cars are more likely to be parked in the street and are at a greater risk for theft. For this reason, the insurance premiums will be much higher than those charged for show cars, and the actual cost will be determined by the type(s) of modification(s).

What modifications matter? Technically, you should report any and all modifications to your insurer, in order to prevent them from cancelling your insurance policy when you most need coverage.

That being said, minor modifications, like upgraded wheels, flashy paint jobs, or even rear spoilers, won't increase your premium by much.

Major modifications, however, especially anything that involves alterations to the engine or exhaust system, can cost you a significant amount of money, or result in your policy being terminated.

What do you do?

To protect your insurance coverage and your wallet, get your modifications approved before you make them. Present your insurance agent with a modification plan and a proposed budget. Do research, and determine the value of cars that are similar to yours and include similar mods. After the work has been completed, contact your insurer again, and provide copies of receipts for the parts you've added.

Most insurance companies are happy to work with you, though some will require that you purchase an endorsement to cover your after-market parts. The bottom line, however, is that more information is always better than less.

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