Modified Car Insurance: What You Need To Know in 2022

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If you change your car to improve its appearance or enhance its performance, you will typically also need a customized auto insurance policy. That’s because modified cars may require special handling at the shop or custom-tailored parts after an accident. Modifications can even increase your car’s overall value, especially if you factor in safety features like anti-theft devices, rear and front cameras and adaptive headlights. See what else you should know when insuring a modified car.

What Is Modified Car Insurance?

Any change to your vehicle that deviates from factory settings is considered a modification and will need custom car insurance.

You won’t find many of these unique features covered by a basic car policy, so you may need to buy custom car insurance or add an endorsement to your existing policy. Endorsements are additional optional coverage for aftermarket modifications that repair or replace your customizations. Not all insurers cover modifications, so check with your insurance company first to see if you need to get additional special coverage or if you need to research specialized insurers.

In most cases, modifications will raise your car insurance premium.

If your car is damaged or totaled in an accident, your insurer will reimburse you according to the original manufacturer of your vehicle. If you added $5,000 worth of upgrades and modifications to your car but did not purchase special coverage, you will not get reimbursement for the $5,000 unless your policy is underwritten with modifications in mind.

What Types of Insurance Are There for Modified Cars?

You’ll need one of the following types of custom auto insurance to get reimbursed for the full value of your car and its modifications.

  • Supplemental coverage: offers additional protection to your basic car policy. Some insurers may call this custom parts and equipment coverage. It covers custom features and the value of aftermarket components, minus your deductible.

  • Stated amount coverage: this pays the actual cash value of your car after the deductible if it is considered a total loss. This might be best if you have lots of custom equipment or auto parts.

  • Classic car insurance: If the coverage limits are not enough to protect your investment, or if your insurer doesn’t offer this type of endorsement, you can seek an insurer that specializes in insuring classic/collectible cars.

Any time you add new parts to your car or modify it, you must let your insurer know. Otherwise, they won’t be able to make necessary changes on the policy to cover custom parts.

Which Modifications Aren’t Covered by Auto Insurance?

Some modifications are not covered by most car insurers. For example, accessories not permanently attached to your car (like subwoofers) are not covered. If your insurer doesn’t consider it to be a part of the car, it will not be covered.

Your insurer may lower your rates for add-on safety and security features.

What Types of Car Modifications Are There?

A few examples of common modifications include:

  • Performance boosters like turbochargers, strut bars and suspension enhancements
  • Appearance modifications like custom paint jobs, chrome bumpers, special lights and custom wheels
  • Stereo systems
  • In-vehicle Wi-Fi
  • Dual exhaust
  • Lift kit
  • Floodlights
  • Truck bed liner
  • Anti-roll or anti-sway bars
  • Carpeting
  • Custom grilles
  • Winches
  • Suspension upgrades
  • Turbochargers
  • Sport seats
  • Tow bar
  • Roof rack
  • Custom paint jobs and interior
  • Window tint
  • Nitrous oxide (illegal in most states)

Will Modifications to My Vehicle Raise My Car Insurance Rates?

Commonly, modifications will raise your car insurance premium. Your basic car policy is based on the manufacturer’s factory specifications. Modified vehicles typically have custom repair costs that can be costly. Insurers may also consider drivers of modified cars to be high-risk drivers and more likely to file a claim. For example, custom parts are often high-quality and expensive and can increase the likelihood of theft. Additionally, by increasing your car’s performance, you may also increase your potential of being in an accident.

However, some modifications are eligible for a discount. Your insurer may lower your rates for add-on safety and security features.

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Why Would I Need Modified Car Insurance?

If you want to be close to fully reimbursed in the event of an accident, modified car insurance is critical. If you fail to update the insurer of your car’s modifications, you won’t be covered and your insurer may invalidate your policy for failing to provide up-to-date information.

If you buy a modified car, consider modified car insurance since specialized repairs and custom parts are often more costly.

Modified car insurance saves you from having to pay out of pocket if you get in an accident or your car is considered a total loss. Custom parts, paint jobs, engine upgrades and more often require expensive parts and specialized mechanics. Failure to get modified car insurance means you risk not getting reimbursed. Being properly insured saves you money in the long run.

Mobility Modifications

Not all modifications are cosmetic, some are utilitarian. The following modifications help those with disabilities to ride or drive a car:

  • Steering cuffs
  • Amputee rings
  • Pedal extenders
  • Modified-effort steering
  • Left-foot accelerator
  • Floor-mounted steering
  • Push-pull hand controls
  • Wheelchair ramps and lifts
  • Wheelchair adjustable seat belts

Interestingly, many insurers don’t distinguish between different types of modifications. They will treat your car the same whether you added a wheelchair lift or supercharged your engine. Insurers cannot refuse to insure a disabled driver, but they may charge more if the car is highly modified.

Does My Car Insurance Cover a Modified Vehicle?

Basic car insurance policies don’t typically cover a modified vehicle. If you have invested any amount of money into modifying your car, you will likely need to purchase modified car insurance. The more money you invest in your car, the more coverage you should purchase.


What happens if I buy a car that already has modifications?

If you buy a modified car, you need to consider modified car insurance since specialized repairs and custom parts are often more costly. Not all insurers will automatically cover modification, so it’s good to shop around.

Should I tell my insurer about my vehicle modifications?

You should declare any vehicle modifications to your insurer to ensure adequate coverage. If you file a claim but didn’t declare any modifications, your insurer may not pay out and your car policy could be invalidated.

Can a car modification lead to a policy discount?

Some safety and security modifications can lead to a policy discount. Your insurer may lower your rates and provide additional discounts for the following:

  • Anti-theft systems
  • Alarms and GPS tracking devices
  • Rearview cameras
  • Daytime running lights
  • Accident-sensor technology

Key Takeaways

  • Notify your insurer if you modify your car with customizations to ensure that you have enough coverage.
  • Many insurance companies offer modified car insurance to protect your modifications if they are damaged in an accident.
  • Ask your insurer if your current car policy covers any modifications or if you need to buy additional coverage.

Considering Modified Car Insurance?

Whether modifying your vehicle for improved performance, cosmetic reasons, or out of necessity, you must consider how it will impact your car insurance coverage. SmartFinancial can help you shop around for the lowest rate in your area. Just enter your zip code below and answer a few questions to get started on free car insurance quotes.

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