Modified Car Insurance

One of the major hassles when building a modified car is insuring it. However insurance need not be a nightmare if you know where to go and how to make your car as insurance friendly as possible. This article offers a complete guide explaining how and what modifications affect your premium and offers tips and tricks to ensure you get the best deal possible.

What effect does modifying a car have to insurance prices?

Modifying your car can sometimes send your premium rocketing, other times it hardly increases it at all. How much it raises it by depends a lot on the type of modification, and also how modified the car is.

The peak - light modification, mainly engine based.

Standard cars are cheap to insure. Obviously this is relative, depending on the car in question. The premium takes a hike when a few modifications are made, especially when those are power based such as an exhaust and air filter. All this looks like to the insurer is you want to drive the car faster. At this point only a couple of hundred pounds has been spent on the car and the risk to the insurer is increased.

The more modified a car is, the cheaper it gets to insure.

This is not always the case but it happens more than you’d think. It sounds unlikely but the thinking behind it is sound. The more time and money has gone into the car, the more likely you are to take good care of it. Both in where you keep and leave it, and how it’s driven. A car that has had a lot invested in it represents a sizeable asset to the owner and therefore incurs the associated responsibility on their part. This is good news for insurers as they are less likely to have to pay out, so the risk is reduced and in turn your premium.

Cars that have had major work fall into this category. Extreme body mods, interior retrims, large ICE install and suchlike contribute to get the car to this status. An exception to the rule would be if the engine power has increased to double or triple that of the standard car, although the premium increase in these circumstances is usually not nearly as bad as you might expect.

What you need to declare

Everything. No matter how small the modification is, you should inform your insurer, or potential insurer if on the phone obtaining a quote. If you don’t declare a modification it can render your insurance void, which could land you in a lot of trouble should an accident occur. Some modifications may not have any effect on the premium, this is usually down to the insurer; some companies won’t apply any loading to the policy for interior modifications, others may only be interested if the mod is performance enhancing rather than merely cosmetic.

Agreed value / modifications not covered

“Agreed value” or “like for like” policies take into account how much the car has cost to build and cover you for an amount that would be enough to build another vehicle to the same specification should a total loss claim be necessary. These policies are usually only offered for highly modified cars and will usually require an in-depth spec sheet to be completed with photos attached, and / or a valuation from a representative of a relevant owner’s club.

“Modifications not covered” is a form of cover that various companies may offer under a variety of names. As the name suggests they will insure the car but not the modifications. This reduces the premium but means that if you 17” wheels are stolen they will only pay out for the standard OEM items that came fitted to the car. These policies may sound like they would cost the same as a standard car but due to the increased risk of a modified car they are still more expensive.

Insurer like and hates

Likes

  • Garages. Keep your car out of sight in a garage and this reduces the risk of it being stolen or broken into. This helps for standard cars, but even more so for modified ones.

  • Limited mileage. If your car is only used during the summer months, or only at weekends then the risk goes down. The less it’s out, the less likely anything is to happen to it.

  • Not used for commuting. Similar to the above, if the car isn’t used at busy times then there’s less chance of an incident.

  • Advanced security. Devices such as Trackers and GPS monitoring vastly increase the chance of a vehicle being recovered after theft, and so mean the insurer won’t have to pay out. Quite often the cost of having a Tracker fitted is recouped with one or two years savings on the premium.

Dislikes

  • The opposite of anything above, daily use, high mileage and little security all increase the risk.

  • “Extreme” modifications. Many specialists refuse to insure cars with modifications such as roll cages and nitrous oxide injection systems. It’s always worth consulting your insurance company before fitting either of these in case they refuse to cover you.

A note about second cars

Unfortunately, due to the way insurance works, it’s not possible to insure two cars on the same policy or apply your NCB to two cars. You’ll need a second policy which will build up NCB of it’s own. Some companies are exceptions to the rule though and will cover two cars on one policy. It’s unlikely that this will be allowed with a modified car though.

Tips to make you car more insurance friendly

Restrict the use of certain modifications to show or off road use

An example of this would be having a car fitted with a nitrous oxide system, but only using the system for track days and runs up the strip. This may mean the bottle is removed for daily use, or more likely your policy would be void if the system was used on the road.

Be modest with power figures

Now is not the time to use pub bhp. You might tell your mates that your cone filter has gained you an extra 10bhp but on the phone to the insurer is the time to admit that all it does is make a noise. Likewise,

Tips to negotiate the price

Join an owners club / group or website

This shows you have a genuine interest in the car and it’s a hobby and not just a method of transport.

Be nice!

The person on the other end of the phone has the power to adjust the price both up and down. If they like you there is a chance they can do you a favour. Be chatty and pleasant even if you’re not being told what you want to hear, and remember that when you are on hold they can still hear you, so don’t say anything derogatory about them to your mate…

Take a higher excess

This is gambling basically. The excess is only something you might have to pay, whereas the premium is something you’re definitely going to have to pay. By raising the excess this brings the premium down and as long as you don’t claim, by the end of the year you are better off. If you are financially inclined, you can always save the difference in premium and put it an account gaining interest and serving as an emergency fund should you need to pay the excess.

Play off insurers against each other.

Insurance is a business and so naturally the insurance companies are in competition with each other and they all want your custom. When you get a good quote, rather than accept it there and then, go back to a rival insurer and see if they can beat or match it. Most of the time they will at least try. A slightly more risky technique is to be economical with the truth when telling the company what their rivals have quoted. Don’t make up a figure vastly lower than the real one though as they’ll cotton on straight away.

Call at the end of the day, or the last day of the month

Calling just before an insurance customer services rep finishes his or her shift, or the company closes for the day can have one of two vastly different effects. Naturally they will want to get you off the phone ASAP, so the possible directions are that they will either not be interested at all, or they will submit to your requests and not put up much of a fight when you haggle.

Also, like many businesses, insurers have sales targets to reach and as a result of this, may be more willing to do you a deal if it’s the last day of a fiscal period and sales haven’t been too good.

Use comparison sites

There are a number of websites available which take your details once and then obtain quotes from a number of insurance companies. This is very useful service that saves a whole load of time, but has a major flaw for modified car owners - the systems don’t take into account any modifications and so it’s something only really of use when insuring a standard car. It may prove useful to get an idea of who the cheapest insurer for your age and area is though.

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