The Impact of Modifications on Car Insurance

There is a huge market out there for car modifications, with an increasing number of motorists choosing to add or change components on their vehicles so as improve the performance or even the aesthetics of their motor.

However, a lot of people simply don’t realise the impact that this could have on car insurance premiums, particularly for younger drivers. In this article we take a closer look at modified car insurance; analysing the potential impact and analyse ways to overcome it.

What is a modification?

Many people may be making modifications to their vehicles without realising that it will have an impact on their car insurance policy. In fact, they may not even be aware that what they are doing counts as a modification.

A modification is simply a change to the vehicle which results in it deviating from its original design specification. The most popular modifications are usually the addition of spoilers or alloy wheels, but internal alterations such as changing the seats or even the gearstick inside the vehicle could still be counted as a modification by certain insurers. They may not improve the performance of the vehicle, but they may still increase the overall value of the motor and hence impact upon the potential pay-out in the event of a claim.

Why is it important to inform the insurer?

Failing to inform the insurer about the new seating could result in them refusing to pay-out for the full value of the vehicle. This is the most likely occurrence in this type of situation.

However, the insurer would be perfectly within their rights to refuse to pay-out all together; citing insurance fraud as the cause due to them having been misled by the policy holder about the exact specification on the vehicle on the policy. This is a possibility if the insurer is feeling particularly ruthless, but is most likely to occur with engine, exhaust, spoiler or alloy modifications; all of which will actually impact upon performance and hence increase the possibility of accidents occurring.

The best advice to anyone who is considering making a change to their vehicle is to check with the insurer beforehand as to whether or not it will be counted as a modification. This even goes for something seemingly insignificant like a new gearstick design.

What is the potential impact of car insurance modifications?

A recent study by a well-known price comparison website found that a young driver under the age of 21 who owns a Ford Focus could see their car insurance premiums increased by over £6,000 upon making performance and appearance enhancing modifications.

While a minor side skirt which was not part of the original design specification would result in premiums increase by just £90; the addition of spoilers and an enhanced exhaust system would push up quotes by over £3,000 per piece.

Of course, this affects young drivers most significantly because it fits with the boy racer stereotype which impacts upon all young motorists who are seen to be statistically more likely to be involved in accidents and hence make a claim.

Nevertheless, it is still something which should be taken into consideration by motorists in any other age bracket who are considering making changes to their vehicles. It is advised that they utilise a price comparison website to find out the potential impact of any hypothetical modifications before committing themselves to the purchase.

Are all modifications viewed negatively by insurers?

Not all modifications will have a negative impact upon car insurance premiums; with any changes which improve the security of a vehicle actually attracting cheaper quotes on account it is being statistically less likely that the insurer will be forced to pay out for claims resulting from theft.

One great tip for reducing the impact of any performance/aesthetic enhancing modifications is to add security enhancing equipment such as tracking devices, immobilisers and also alarms. It may cost a bit more initially to purchase the equipment, but the long running cost savings may well out-weigh the initial expense.