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Modified Cars
and Insurance Costs
Cars that have been customised or modified in any way can attract higher insurance
premiums, and in many cases this is exactly what happens. However, if you take
a more detailed look into the subject of modified cars and their insurance policies
it soon becomes obvious that things aren't always this simple. One reason for
this might be due to the amount of modifications it is possible to do to a car,
right from the very simple such as fitting alloy wheels, body kits and tinted
windows, to the more adventurous type that increase its speed and performance.
And these few examples don't come anywhere close to the actual number of modifications
that are possible. Because of this there is ample scope for insurance premiums
to be affected in many different ways, with some modifications only causing a
small increase in premium while others can virtually send it through the roof.
This does tend to make modified car insurance a rather confusing topic, and can
leave the whole thing wide open to a lot of speculation.
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Another reason for the complex nature of modified car insurance could well be
attributed to the insurance companies themselves, as each will often have their
own set of guidelines for calculating quotes. So diverse are these guidelines
that at any one time it is thought nearly half of all UK insurers are unwilling
to quote for modified cars at all. The rationale behind this is that modified
cars pose a much higher risk on the road, consequently many insurers choose not
to take on this extra risk, which from a business point of view does make perfect
sense. Instead they prefer to market their products towards those deemed less
risky, that is the drivers of standard, unmodified and non-customised cars. Fortunately
there are exceptions however, so finding an insurance company willing to give
a quote is not altogether impossible. Many of these will be specialist insurers
who have built their business around the modified car market, though you might
be lucky and find several of the well-known brands are still willing to give a
quote too. It does depend a lot on the amount and type of modifications that you
have done. Too many and you could well be left with only with the specialist insurer
willing to give you cover.
Two Common Questions Regarding Modified Cars
There are probably hundreds of questions that come to mind when debating modified
car insurance, but the two that most frequently crop up are: - What changes do
insurers class as modifications? - Are there any modifications that do not have
a negative affect on insurance?
Unfortunately there is no definitive answer to either of these. The answers lie
with each individual insurance company and the guidelines they adhere to when
calculating quotes. It's therefore a wise move for anyone thinking of modifying
their car to find out in advance what the insurance implications are likely to
be. This is quite easily done by calling up the insurer's customer service department
or emailing them and requesting the information. At least with this knowledge
beforehand you have chance to reassess the situation, and if it's going to prove
costly you can either put the modifications on hold or search around for cheaper,
alternative cover.
A Few Rules of Thumb
Although modified cars are treated differently by many insurance companies there
are still a few generalisations that appear common to all. One of these is the
point at which a car is deemed modified. Generally speaking it is when changes
have taken place that alter it from its original factory configuration. This does
appear to leave little room for doing any modifications at all without it affecting
your insurance, and strictly speaking this is very true, however there are modifications
that can be considered more insurance-friendly than others.
Any modification that increases a car's value is highly likely to increase your
premium. When calculating quotes insurance companies use this statistic as a major
contributing factor to the overall cost, so any increase in value will naturally
affect your insurance. Also, modifications that enhance a car's performance will
often result in increased insurance costs. Some examples of this are: altering
a car's suspension, tweaking the engine or fitting an exhaust system capable of
increasing its performance. If at the same time these are fitted professionally
then they may also increase a car's value. This would automatically make the car
a much higher risk on the road and subject insurers to more expensive claim payouts.
An insurance policy for a car of this type would undoubtedly cost the owner a
lot more.
Alloy Wheels
Fitting alloy wheels to a car is probably one of the easiest and most widely done
alterations, but many are unsure whether this is classed as a modification or
not. The bad news is that in theory it is. It all stems back to the car losing
its original factory configuration. If the car came off the production line without
alloy wheels then in reality it has undergone some modification. Although having
alloys will not normally increase a car's performance it can increase its value.
This is why those who fit them should be prepared for an adjustment on their insurance,
as many companies will take their additional value into account.
It's worth noting that no matter how much you spend on modifying a car, you will
often find that insurance companies retain its original value for the policy.
This means in the event of a claim you would be looking at the car's unmodified
value, and not as it stands with all the extras you may have added.
Legal Obligations With Modified Cars
One important thing to remember is that you are legally obliged to inform insurers
of any modifications that you do. This is vitally important as failing to declare
them can potentially invalidate your entire insurance policy. This would mean
in the event of you making a claim, and the insurers discovering an undisclosed
modification to your car, you could be left high and dry with a null and void
policy. The modification disclosure rule is normally found in the terms and conditions
of a policy, with the onus very much on the policyholder having to inform the
insurer, and not the other way round like many seem to believe.
Thatcham Rated Devices
Thatcham ratings (NVSR) are an easy way of identifying the security and anti-theft
effectiveness of any vehicle, with the system awarding up to five stars for cars
that perform well in security tests. Cars given higher ratings are deemed less
of a risk to insurers and naturally tend to attract lower insurance premiums.
Along with vehicle ratings, Thatcham also test car security devices and rigorously
check many of those that are on sale in the UK. By fitting a Thatcham approved
device you are significantly enhancing your car's security, and at the same time
giving insurers a great opportunity to be more lenient with your insurance costs.
Adding an approved security device is probably the only modification that does
not run the risk of increasing a premium, and on the whole it will generally attract
a healthy discount.
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