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 as The Fast and Furious. Its popularized stunt driving 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 needs to be a top consideration. Car modifications can impact your 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 costs.

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 are 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 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, while 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, it's legal.
  6. Coloured lights, turn signals, or side marker lights : The only legal colours you can add to the front of your vehicle are 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 that 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 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, 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. You'll see a hefty increase in your Toronto car insurance.

Does Insurance Cover Modified Cars?

Modifications for accessibility, appearance or safety purposes are usually covered by your insurance. Adding aftermarket safety features like dashcams, enhanced braking system, and anti-theft devices also qualify. Sometimes you may even qualify for an 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 to see if your car can be insured.

Does Modifying A Car Increase Insurance?

Modified car and rims

Before you modify your vehicle, you need to check with your company to see if they insure 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. Insurers will not cover illegal vehicle mods, even if the job is complete.

What Car Modifications Are Covered By Insurance?

Legal car modifications can be added, but often at a cost. Before adding any mods to your vehicle, confirm they are legal in your area and how they will affect your car insurance quote.

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

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

How To Insure A Modified Car

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

If you have modified without consulting your insurer, there is a possibility you have violated your insurance 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 if a driver does not properly disclose modifications.

When you modify 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

The cost for insurance on a modified car can vary based on what modifications have been done. Your car mods may place you in a high-risk category. Reports show that car mods can increase costs 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 insurer, you risk having your claim denied or your insurance 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 insurance. Here are some car mods that can void it :

  • 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.

If you have any modified parts inside or outside your vehicle, you need to contact your provider make sure it's insured properly. Some mods will be easier to cover, while others may not be covered under your current insurance. There is high risk auto insurance, but there are fewer options available.

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 ensure your car is safe. Once the job is done, notify your insurer so they can update your policy.