How Car Modifications Affect Insurance Premiums!

How Car Modifications Affect Insurance Premiums!

Have you ever thought of kitting your car with some new alloys? Or, giving your quirky car coat of paint or maybe adding the extra headlights? Well, modifications are amazing and give your car a personalized makeover, the downside of them is they bump up your car insurance price.

What is car modification?

Modification is all about changes that are made to the vehicle. These changes are introduced to give the vehicle its modified appearance or performance. Different types of car modifications are:

•    Performance modification: These modifications are made to increase the power, handling, fuel efficiency, and other things about a car. Moreover, changes in the exhaust system, brakes, suspensions, tires, air filters come in this category.

•    Functional changes: These changes are usually the old ones on the vehicle. Such modifications are added because of the absence of functionalities in a vehicle. Things like installation of air conditioning, sunroof, car phone, roof rack, and navigation system are some modifications.

•    Aesthetic Modifications: These modifications are made to make the vehicle look different and unique. The aesthetic changes involve tweaking the outer body of the vehicle, making vibrant and more.

What Modifications Affect Your Car Insurance?

•    Engine And Mechanics: These modifications are done only to increase the performance of the engine. However, road accidents are made because of high speed; therefore adding supercharge will increase your insurance cost.

•    Breaks And Suspensions: If you are upgrading your car brakes and suspensions, the performance of your car will also change. In such a case, you should inform the insurer about such changes and other details.

•    Wheel Modifications: These are done to enhance the overall look and the value of the car. So, if you have made such changes, inform your car insurer like very cheap car insurance provider to get wheels modified.

•    Interiors: If you are modifying the interiors more than steering, sound system, pedals, and more, your insurance company can have a problem.

Other factors that decide the car insurance premiums of a used car are:

Types Of Coverage:

The variation in the car insurance policy depends on the overall coverage and the benefits offered by the insurer. While the comprehensive coverage policy offers more than third party insurance, it does not cover your own vehicle from accidents. However, with better coverage, it becomes costlier than other third party insurance.

The location also helps in deciding your insurance premium. For instance, if you are living in a location, which has a lot of claims because of natural calamities, the insurance premium will also get affected. Also, the traffic density in such cities is higher because of the higher number of accidents and skyrocketing premiums.

IDV (Insured Declared Value):
IDV is the actual market value of the vehicle and is defined as the highest sum that is payable by the insurer for having a motor insurance policy. You can also call it the maximum amount that you can claim in case your vehicle gets stolen, damaged, or lost. Higher the IDV, higher will be the insurance premium payable and vice versa.

No Claim Bonus:
NCB or No Claim Bonus is an incentive given by the insurer for not making any claim. This is only offered if the vehicle owner has not made any claims with respect to the motor insurance policy. Moreover, it can be transferred to other insurance companies and is subjected to evidence in the form of renewal.

How You Have Used The Vehicle:

Vehicles are used for both commercial and personal use. Also, the commercial vehicle attracts high insurance because of high wear and tear, and more usage. Therefore the premium for both personal and commercial vehicle policies is different.

While you have complete freedom to modify your car, just make sure to give all the information to the insurance provider. This will make it easy for an insurer to change the insurance premiums.

Last updated:11/16/2019 2:13:19 AM
Sandra Helman

Sandra Helman

Sandra Helman is a financial blogger and I am blogging since 2012. The main aim of this blog to help people to make well-informed financial decisions.


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