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What is the Impact Of Modifications on Your Car Insurance Policy?

People are often fond of modifying their cars and altering them once they are out of the showroom. The modification includes many components and could be a minor change or a significant alteration for revamping your car. However, policyholders are unaware of how modification increases car insurance premiums.

These changes add to the original cost of the insurance policy and pose a high risk of theft than ordinary cars. The prices of these parts are generally more than the actual cost of the vehicle. Several companies like Tata AIG offer a car insurance calculator to check the premium before buying insurance online for a car. Therefore it is advisable to check the potential increase in the costs of your insurance premium when you modify your car.

What is Car Modification?

There are some misconceptions with classifying what a car modification is, and it becomes essential to understand what counts as a modification. The word ‘modification’ precisely includes the changes you made to the car’s original condition that the manufacturer has sold to you.

As per the records, insurance companies follow the terminology of modification which classifies as the changes that have made your car look or perform differently. One thing that policyholders miss out on is the optional extras offered by the car dealer. They are also counted under modification when you purchase a brand new car.

However, modifications done by manufacturers are market-approved and included in the car insurance policy. This article will detail several car modifications and how they affect the premium of the insured car.

How do Modifications Affect the Car Insurance Premium?

There are two factors that insurance companies consider before quoting the final price of the insurance premium.

  • Risk of theft: The modifications that increase the performance of your car pose a high risk of the vehicle being broken into or stolen. It increases the premium that you pay for the insurance of your car.
  • Risk of an accident: Modified cars are often prone to accidents. The insurance companies often raise the premium when the car owners do modifications to the engine, spoilers, body kits, sports seats, etc.

What Modifications Can Affect Your Car Insurance Premium?

There are several modifications that insurance companies consider as a modification to your vehicle. It is advisable to check the premium for car insurance online before opting for any change.

  • Engine and mechanics modifications

The modifications that increase the engine’s performance or accelerator speed come under the modification policy. They pose a higher risk of accidents as people are engaged in over-taking, driving at high speed, and other accident-prone activities. They add up to the extra cost of your insurance for the car.

  • Breaks and suspension

Breaks are considered vital, and insurance companies often assess the cars before insurance. Policyholders need to cross-check the premium as modifying breaks and suspension affects the car’s performance. Therefore, it is advised to inform the insurer of such amendments, including the service provider’s details.

  • Wheel modifications

Wheel modifications add to the grace of vehicles, and policyholders need to inform the Insurer prior regarding the changes made in wheels.

  • Car interior

All the components of the car interior do not count towards a modification. If you are adopting the changes, but these are not limited to steering, pedals, sound system, seats, etc., you need to inform your car insurance company.

  • Non-standard engine change

Changing your engine can lead to a surge in car insurance pricing. A non-standard engine may be equipped with less competent parts and lead to breaking down or an accident. Therefore, it becomes crucial to inform your insurance provider to calculate the changed premium on your car.

  • Paintwork

Policyholders are often involved in changing the look of their car by adding complex racing designs and eye-catching patterns. These changes do not harm the car’s performance but still require you to inform your car insurance provider.

Not all modifications mean an increased insurance premium. Generally, insurance companies charge a higher premium to the policyholders when modification increases the chances of theft or accidents. However, the premium may not increase when opting for a change that decreases the risk of an accident or theft.

Why is it Necessary to Inform the Insurer About the Modifications?

The policyholders are required to inform the insurance companies of any modifications done to the car. If you choose not to notify the insurance companies, your claim application may be rejected by the company.

In the case of a second-hand car, it is advisable to get your vehicle examined by a mechanic and inform the insurance company of any changes or modifications done by the previous owner. If your insurance is declined or cancelled once, you may find it even harder and costly to get car insurance in the future.


People have so many car modification ideas in India. The increase in premium doesn’t restrict people from modifying and adding a personal touch to their car. The altercations add to the car insurance premium, and it is crucial to inform the insurance companies beforehand. It will help them better analyse the vehicle and change your car’s insurance premium. It is not advisable to wait till the last minute to inform your insurer about the modifications as it can lead to unnecessary hassles at the time of claim processing.