In Focus 10 Aug 2022 How Modification To ...

How Modification To Your Car Impact Insurance Policy?

DECCAN CHRONICLE. | DECCAN CHRONICLE
Published Aug 10, 2022, 8:10 pm IST
Updated Aug 12, 2022, 5:35 pm IST
Many people are unaware of the impact that car modifications have on car insurance.
 Many people are unaware of the impact that car modifications have on car insurance.

Who doesn't enjoy driving a stylish, high-performing car? If you are someone who spends a lot of time in your car, you may be interested in customizing the vehicle to reflect your personality.

You can modify your car to improve its performance or enhance its appearance. It may involve everything from installing new floor mats to updating the upholstery. However, many people are unaware of the impact that car modifications have on car insurance.

This is because modified cars are thought to have more risks than regular cars.  Additionally, it has been discovered that teenage drivers are typically the ones that customize cars. Insurance firms believe that these drivers are typically reckless on the road. Moreover, the upgraded or replaced parts can end up costing more than the car itself.

Modifications That Can Affect Your Car Insurance Policy

Here is an explanation of how various car modifications will impact the cost of your car insurance:

Engine Modification: In order to increase a car's performance, people frequently modify the engine. The vehicle can accelerate more quickly and reach higher speeds, thanks to these changes.  Although engine upgrades are highly desirable, you may find that the cost of your car insurance policy increases as a result. This is due to the fact that by increasing your car's performance, it turns into a dangerous machine that may tempt you to drive too fast and overtake other cars recklessly.

Paint Job: You may think that getting your car’s paint changed might be an insignificant modification in terms of your car insurance policy, but it also requires you to inform your car insurance provider. Especially, drastic modifications, such as eye-catchy designs or racing designs increase your car insurance premium because it imposes greater possibilities of theft and various other risks.

Wheel Modification: If you are thinking of replacing your car’s original wheels with beautiful wide tyres or alloy wheels, keep in mind that your insurance rate may increase by 8% to 18%. This is simply because expensive wheels have a high resale value, making them very lucrative targets for thieves. Thus, altering your car's wheels can enhance the likelihood that they will be stolen by making them quite appealing to criminals.

Changing Car Interiors: Interior body alterations typically make a car less safe and increase the likelihood that it will sustain serious damage in an accident. Therefore, your car insurance policy's price will consequently go up. In case you change your car’s seats, the policy premium will typically rise by 27%, and if you wish to change your car’s dashboard and upholstery, it can lead to a 16% increase in the premium amount.

Non-Standard Engine Replacement: Based on the make, model, brand, and year of manufacture, the insurance company assesses a typical car insurance premium for engines that are factory installed. Therefore, switching out the engine from the original manufacturer with a non-standard one will affect the premium costs.

Brakes & Suspension Modifications: There is no doubt in saying that brakes are the crucial component in controlling any vehicle. Therefore, in case you do modifications to such critical parts, such as car brakes are updated or suspension is modified, the insurance company will become alert because your car’s performance will certainly change on the road.

Note: Not every alteration raises the cost of car insurance. For instance, installing a tracking system or an ARAI-approved anti-theft alarm system in your car reduces the likelihood of theft or break-in. Similarly, installing parking sensors will lessen the possibility of unintentionally reversing into another vehicle or a wall. These changes lessen the risk for the insurer.

What To Remember Before Modifying Your Car?

It is very important to inform your insurer in advance about any changes that you are going to do to your car. This will assist the insurance company to evaluate the effects of modification on your car and calculate the premium accordingly.
It is not highly recommended to intimate the insurance company about the modification at the last moment or when your policy renewal date is around the corner. If you do so, it may undermine your car insurance policy. By informing your insurance provider, you might have an increase in your premium; but if you do not disclose it, it might be considered a disingenuous act that can further lead to various problems during the claim process.

Final Thoughts
More and more people are choosing to customize their cars despite the expense involved. Some specific alterations will dramatically raise the premium price, while general tweaks may not raise the premium value significantly.
While modifications can make your car the talk of the road, you should be aware of the associated costs. Do inform your insurer about the changes you have made to your vehicle; otherwise, your insurance claims risk being denied.

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