Blog Car Modifications And Insurance

Oct 6, 2020

Will Car Mods Impact Insurance?

Two modified hatchback cars

Insurance for modified cars is often overlooked or ignored by vehicle owners. Car mods have increased in popularity with the rise of popular films such has the Fast and the Furious. Its popularized the street racing and custom car culture. One thing you don’t see in these films is a discussion about insurance.

Are you thinking about modifying your car? Do you already have modifications? Insurance absolutely needs to be a consideration. Car modifications can impact your Ontario car insurance. Many drivers of modified vehicles lack proper coverage. If you plan on spending money on vehicle mods, you want to make sure you know how it will affect your premiums.

Insurance for modified vehicles may not be as simple to get as you think. Here is what you need to know when it comes to vehicle modifications.

What Are Car Modifications?

Car modifications is making a change to how your vehicle looks or performs. Modifying a vehicle can be a cosmetic change for drivers to personalize their ride. Car mods can also include improving the functionality of the vehicle.

Many drivers want to optimize their vehicle for more than what it was originally designed to do. These upgrades can improve engine performance, fuel economy, and dynamic handling characteristics. Car mods can include interior design, stereo systems. or external mods such as engine tuning, suspension, and tire mods.

11 Most Common Vehicle Modifications

There are countless ways you can modify a vehicle. Here are the most common mods. Some affect insurance, others don’t :

  1. Lowering vehicle suspension : As long as your vehicle is not touching the ground, your tires are not making contact with your vehicle, and your front wheels are visibly aligned, you can legally lower the suspension on your vehicle.
  2. Engine mods : It is illegal to remove the oxygen sensor or charcoal canister from the vehicle. Installing a breather filter or cold air intake system if the emission control equipment stays in place is legal. Adding a turbocharger or supercharger to your engine is also legal car mod.
  3. Tinted windows: You can tint your back windows to any intensity, but your front windows and windshield are required to have a clear view.
  4. Paint colour : You can change your vehicle colour if you apply for a new vehicle permit.
  5. Tires and rims : Replacing your tires and rims with custom or oversize versions is common. If the tires are approved for highway use, its legal.
  6. Coloured lights, turn signals, or side marker lights : The only legal colours you can add to the front of your vehicle is white and amber. If you want to add side marker lights, your vehicle must be longer than 6.1 meters. The lights cannot be flashing and must not be visible from the front of the vehicle. Keep in mind red is restricted to fire trucks, ambulances, and police cars; green is only for volunteer firefighters and blue is designated for snowplows. It is against the law to cover headlights with tinted or coloured materials.
  7. Replacing seats : There are no restrictions on replacing your seats, as long as they are designed for highway use. It is also legal to install a racing harness if they are approved for highway use and the anchor points are strong enough.
  8. Exhaust systems : Unnecessary noise or smoke coming out of your vehicle is illegal. Check the exhaust performance specs to make sure you are within legal limits.
  9. Replacing the steering wheel or instrument cluster : These interior changes are legal. Make sure your new steering wheel connects to your horn switch and the odometer is working.
  10. Adding a spoiler or fin : These are completely legal to add to a vehicle, just make sure it is secured safely and does not obstruct the view from your mirrors.
  11. Nitrous Oxide (NOS) : this cheap way of adding power to your car is an illegal car mod in Canada. Drivers caught with NOS will face penalties up to $2,000 and six months in jail.

Does Insurance Cover Modified Cars?

Modifications for accessibility, appearance or safety purposes are usually covered by your policy. Adding aftermarket safety features (dashcams, enhanced braking system, and anti-theft devices qualify for coverage. Sometimes you may even qualify for an car insurance discount. It is important to hold onto receipts and let your insurer know how much you paid for the mods in the event of a claim.

If cars are modified with performance enhancers (swapping out engines or exhaust system upgrades), you will have to speak with your insurer because many do not issue coverage on these types of modified cars.

Does Modifying A Car Increase Insurance?

Modified car and rim

Before you modify your vehicle, you need to check with your insurance company to see if they cover vehicles with modifications. Performance-enhancing modifications, such as changing the engine or modifying the exhaust system, can increase your premium since the vehicle is not factory certified.

By adding new components to your vehicle, you can impact its overall value and the cost to repair it if damaged in an accident. Therefore, modifications can increase rates. Illegal vehicle mods will not be covered by insurers, even if the job is complete.

What Car Modifications Are Covered By Insurance?

There are some modifications that don’t affect car insurance. Legal car modifications can be added to your coverage, but often at a cost. Before adding any mods to your vehicle, confirm they are legal in your area and how it will affect your rate.

Mainstream car mods such as a bike rack, alloy wheels, stereo systems, and chrome exhaust systems are often covered by your insurer. Speak with your insurer to verify what mods they cover. What is and is not covered can vary by insurance provider.

If you make any changes to your vehicle to make it more accessible for people with disabilities, it will not have a big impact on your rates. However, if the value of your vehicle is significantly increased (adding a wheelchair lift, hand controls, or custom seats), it can increase your premium.

How To Insure A Modified Car

A modified car can be insured in Canada. Owners should inform their insurer of the modifications prior to installation. This allows you to know if your modification is covered and how much it will impact your costs.

If you have made a modification without consulting your insurer, there is a possibility you have violated your policy agreement. If you do not tell your insurer about any car mods or lie to your insurance company, you risk having your claim denied if there is an accident. Insurers can deny or cancel coverage if a driver does not properly disclose modifications.

When you are modifying your vehicle, you also need to apply for a new vehicle permit. Changing your engine, fuel system, doors, axels, or vehicle body style will require a new permit.

Car Modifications and Insurance FAQs

Car modifications can have an impact on your insurance, even if you are modifying for style. Here are the most asked questions about car mods and insurance coverage.

The cost for insurance on a modified car can vary by coverage and what modifications have been done. Your car mods may place you in a high-risk category. Reports show that car mods can increase rates up to 36% higher. Some companies offer an agreed value policy – if your car is a total loss due to an occurrence or accident, you will be paid the agreed upon amount.

Yes - if you do not declare car mods to your insurance company, you risk having your claim denied or your policy cancelled. There is also a risk that you will pay a high amount in expenses, especially third party claims. As a policyholder, it is your responsibility to declare all modifications, performance enhancing or appearance, to your insurer. Failure to declare car mods also puts you at risk for insurance fraud.

Any modifications that result in breaking law will void your policy. Here are some car mods that can void your coverage :

  • Under car neon lights
  • Sound and noise modifiers including NOS and exhaust systems
  • Illegal wheel mods
  • Tinted windows that restrict more than 70% of light

Unless you are selling your car in Ontario to someone who wants the modifications, you could be lowering the resale value of your vehicle. Cars are built to specific requirements for a reason – engines, brakes, frame, suspension, and tires are all chosen by a manufacturer for performance and safety. When those features are altered, they can cause issues when the car needs maintenance. Even though car value may go down, it doesn’t mean your insurance will go down.

Modified car insurance is for vehicles that have been altered. They have been changed from to be different from the factor production model. Vehicles with performance-enhancing modifications, structural alterations, and customize paint jobs all need proper coverage. All vehicle mods need to be shared with your insurer who will update your policy to reflect the changes. Some mods will increase your premiums drastically, while others will only have a minor increase.

If you have any modified parts inside or outside your vehicle, you need to contact your insurer to make sure there is proper coverage. Some mods will be easier to cover, while others may not be covered under your current policy. There are specialty and high risk insurance providers that can help with coverage, but there are fewer options compared to a regular vehicle.

Check With Your Insurer Before You Modify Your Vehicle

Before you add any modification to your vehicle, do your research and check with your insurer. Have the mods installed or inspected by a qualified professional to make sure your vehicle is safe. Once the job is done, notify your insurer so they can update your policy.

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