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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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