Does a car modification affect car insurance?

Car modifications will affect car insurance rates. Standard insurance policies are designed to cover a vehicle with the original manufacturer parts, and adding modifications will change the value of the vehicle. Car modifications will raise auto insurance rates because now the vehicle is more expensive to repair. Use our free comparison tool below to find cheaper rates after adding car modifications.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 27, 2020

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Things to know...

  • If you change the look of your car or add parts to change its performance, you’re investing in car modifications
  • Standard insurance policies are designed to cover a vehicle based on the manufacturer’s original factory specs
  • Since modifications can increase the risk of accident and the risk of theft, they can raise your premiums
  • Some modifications will cost you more than others. The most expensive change would be supercharging the engine
  • Let your insurer know so that you can be charged for the modification or your claim for damage will be denied

Years ago, there were several different TV shows on cable that focused on showing people how far some vehicle modifications could go. Older models with major defects were turned into the ultimate ride complete with entertainment systems, neon lighting, and even suicide doors. Many believe these shows are what inspired people to modify their own cars.

If you’ve recently changed your exhaust system, added roll bars, or upgraded your boring upholstery, you need to be sure that you still have the coverage that you think you have. Those additions that you’ve made won’t just cost you money and time, they could cost you your protection. Car insurance pays for all types of damage, but will it pay for damage to a modified car? Compare rates with our free comparison tool above to make sure you get the best rates!

What makes a car a modified car?


Making a car your own doesn’t automatically make it and modified the vehicle. If you add floor mats, steering wheel covers, or a personalized license plate holder, the car is not going to suddenly fall into the modification bracket. The changes that you make need to be permanent, not removable.

By definition, a car modification is a change that the owner makes to the vehicle so that the vehicle is not the same as others that still have the manufacturer’s original factory specifications.

Most of the time the changes will be performance-based, however, it’s not unusual for some modifications to enhance aesthetics. Some modifications improve function and appeal.

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How does an insurance company cover car modifications?

If you’re buying physical damage coverage on your vehicle, the insurance company is obligated to pay for repairs after the car is damaged by a flood, a vandal, a fire, or a collision. The company doesn’t just cover specific parts of the car, it covers the entire vehicle from bumper to bumper.

If you damage just the front end of the car and the total estimate to repair it isn’t higher than its value, the insurance company will pay for all of the parts and labor that is needed to get the car up and running.

If, however, you have installed modified parts to improve your car’s performance, find out that those parts are not covered. In rare circumstances, your entire claim may be denied simply because you have car modifications that you didn’t tell your insurer about.

This usually doesn’t happen just because you installed an exhaust system that makes more noise or a spoiler, but it could happen if you were to turbocharger engine or change another component that would make the vehicle much more risky on the road.

How can you ensure that your modifications will be covered?

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Just because you’ve invested some money in your car to make it unique doesn’t mean that you have to go out and buy a completely separate policy. That would be the case if you had a rare exotic vehicle that exceeds normal values, but if you have a standard private passenger vehicle that you’ve just upgraded a bit you can still continue to carry standard insurance.

They to avoid having any gaps in your coverage is to notify your insurance changes that you’ve made to your car. Any modifications that have been made, adding something like a car stereo, must be insured under your policy. If you haven’t called your insurer to tell them about it, there’s a good chance there’s no coverage.

What does scheduling coverage mean?

Scheduling coverage for something means that your listing a specific item under your policy and stating its value so that it is safeguarded. When your car is modified, to keep all of the receipts showing how much you paid for the parts and also for the installation of the modifications. This will justify covering the addition for a specific amount of money.

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Will you have to pay more?

When you update your policy you have to feel a sense of relief that you have coverage for all of that work that you did. After that relief dies down, it will hit you that you have to pay more for your coverage. It’s very common for an endorsement to add modifications to the policy to raise your premiums. By how much depends on the type of modification.

Why would you have to pay more when it’s the same car?


Your car is still the same vehicle and you’re still the same driver so you might wonder why your left paying more just because you paid for some modifications.

You as a driver won’t change when you spend money on new parts, but the risk associated with the vehicle could definitely change. It might sound silly that a spoiler or new decals could change the likelihood that your car will have a claim, but it can. Here’s how:

  • Greater Risk of Accident – If you turbocharge your engine to give your vehicle more torque or you add a performance part that makes the vehicle faster, you have a greater risk of being involved in an accident.
  • Greater Risk of Vandalism – When you add leather upholstery, spoilers, undercarriage lights, decals, and other modifications that make the car look more valuable, you’re a lot more likely to fall victim to a vandal.
  • Greater risk of High Claims Payout – Cars with original factory specifications are typically not worth the same amount of money as vehicles that have been modified. The insurer is on the line for more money which means you’ll pay more money

Do all modifications cost the same amount of money?

Every modification has a different premium attached to it. It’s up to the company to decide how much you’re ultimately going to pay, but naturally some additions are just a lot riskier than others. Here’s a list of common modifications ordered from most expensive to least expensive:

You have to modify your insurance when you’re going to modify your car. If you do one without doing the other, you’re not going to have the protection that you need. Before you start investing in the changes, see how much it’s going to cost you. Get some online quotes today, and get an idea of the total cost of that modification that you want to do.

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