Does modifying your car affect insurance?

Modifications to your car will affect your auto insurance rates. Upgrading the engine will cause a large spike, but improving the safety features can save you up to 8%.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Oct 20, 2021

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Here's what you need to know...

  • Even cosmetic modifications can increase your insurance rates
  • Supercharging the engine will result in the highest increase in premiums
  • There are some improvements that can lower the cost of insurance


When it comes to your car, you can personalize it to better suit your personal style and needs. You want to protect your investment by ensuring that you have the right coverage.

When you better understand how modifications can impact your premiums, you can make more informed decisions.

Compare car insurance today to get the best protection for your money. Enter your zip code above to get started.

You Must Notify the Insurer

Insurance companies base their rates on the information available through the VIN number. This is how they determine the power of a car, the likelihood that it will be stolen, and set the risk level.

By making a change to the car, you effectively change those calculations.

This is why you must inform the insurer when you make any changes to the factory or dealer package that your car came with.

If you add a spoiler that makes your car more attractive to criminals and it’s stolen, your insurance company may not cover you if they didn’t know about the modification.

To avoid allegations of fraud and hassle when it’s time to file a claim, make a call to your provider before you spend money on the modification.

They can update the records, you can find out if your rates are likely to change, and you can shop around for a different plan if you feel that’s necessary.

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Consider the Risk

Some modifications won’t affect your premium, but others can make a huge difference in the amount you pay.

The insurance companies typically have one standard to make the determination, and that is whether the modification makes your car a higher risk.

For example, a nitrous oxide injection system will add a good deal of power to your car, and it increases the chance that you’ll be involved in an accident.

On the other hand, a new paint job or locking wheel nuts really don’t change the performance of your car, so it’s unlikely that they’ll have an impact on your rates.

Before moving forward with any modification, consider calling your insurance provider to see what they’ll do with your rates. There are some surprising modifications that can increase your rates, including:

  • Alloy wheels
  • Body kits
  • Tinted windows

If you have your heart set on certain customization and don’t want to deal with the higher premiums, then it may be time to shop around for better rates.

You can use a comparison tool to quickly look at different companies and see if there’s one that will let you have the mods you want at a rate you can handle.

Some Changes are Positive

Modifications can alter your rates, and some can actually move them in the right direction. If you choose to make alterations that result in a safer car that’s less of a risk, you may effectively lower your premiums.

If you want to personalize your car while taking care of your insurance rates, then focus on changes like parking sensors and rear backup cameras that will lower the chances of an accident.

Car alarms are another custom addition that may pay you back through lower rates because your car will be less attractive to thieves.

The Role of Vehicle Value

When setting rates, insurers also look at the value of a car. Since this is ultimately the price they could payout in the event that a car is totaled, they do charge more for cars with higher values.

Car modifications can be costly, and they do tend to increase the overall value of your car. This is why even innocuous changes can result in adjustments to your fees.

To avoid paying higher rates for the same coverage, shop around for a different company. You may find that another provider can help you save money while allowing you to invest in the modifications you want.

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Changes to the Engine are the Most Expensive

Of all the modifications you can make, anything that alters performance will result in the largest premium increases. Some studies find that turbocharging your engine can more than double your rates.

This is in part because the car will be able to reach top speeds faster, but it’s also because the bodyweight and design of your car may not be conducive to those higher speeds.

While you want to avoid the increased costs associated with modifications, you don’t want to invalidate your policy. If necessary, use a comparison tool to find more affordable rates for your modified car.

Solutions for High-Value Cars

Some modifications can actually make your car difficult to insure if the value rises too far above the book value. In this case, you may require supplemental coverage to take care of the additional equity created by your modifications.

It’s important to note that some changes simply will not be covered by an insurance plan so you’ll want to speak with your agent first.

If your existing company isn’t able to help you, don’t worry. You can always compare plans with other groups to see if you can find the right coverage elsewhere.

Special Coverage May be Required

Insurance companies use statistics to determine risk, and those numbers may not be available for certain modifications.

Some insurers may not be set up to deliver any type of coverage, so your modified can may wind up being canceled completely.

If your insurance plan refuses to cover the modifications at all, then you’ll need to shop around for another company. There are several companies that offer insurance for modified cars, and you can still shop around to find the best rates.

When you make the investment in a modification, take the time to protect it by communicating with your insurance carrier. There are some changes that won’t change your rate, but you should still be prepared for an increase or even a decrease.

Don’t hesitate to look at different plans if you believe it’s necessary. Start comparing now by entering your zip code below!

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Enter your ZIP code below to view companies that have cheap auto insurance rates.

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