Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Sep 27, 2020

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Key takeaways...

  • Insurance premiums can rise drastically when a car is modified
  • Risk levels increase along with performance-enhancing modifications
  • You can shop around for specialty insurance to get the coverage that you need

As the owner of a car, you have the right to make changes to it. You can change the color, add security or safety features, and take steps to improve the performance.

The insurance companies base rates in part on the information contained in the VIN.

Any deviation from those details can result in changing premiums, so it’s important to keep your company informed when you make a change to the car.

If you are looking for the best auto insurance rates for your modified car, start comparison shopping today by entering your ZIP code above!

What the VIN Tells Insurers


Register for insurance and your provider will immediately ask for the VIN on your car. This string of 17 letters and numbers reveals a wealth of information, including the model, type, make, model year, and body style.

However, the VIN provides a good deal of additional information, as well.

The insurance can look at this information to see what type of braking system the car has, how much cargo it carries, and the curb weight. They know the fuel type, safety systems, and available seating.

They even see the wheelbase, height, length, and width of the car. All of these details are worked into the premium.

The VIN may also be used when ordering replacement parts. If you drastically modify the car, the insurance company may know by looking at the information contained in your VIN and comparing it to the current condition of your car.

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Some Modifications Are Illegal


It’s not just your insurance premiums that you need to worry about. There are also certain modifications that may be illegal in your state.

You can get a ticket and be forced to revert the vehicle back to factory standards. Items that may be illegal in your state include:

  • Radar detectors
  • Exhaust systems that are louder than 90 decibels from 50 feet away
  • Lift kits that elevate a truck by more than two to three feet
  • Lowriders
  • Underbody neons
  • Removal of emissions systems and rolling coal systems
  • Extremely dark tint and tint on certain windows
  • Plate frames that obscure part of the plate
  • Nitrous

Increased Risk of Accidents


In the eyes of the insurance company, some modifications increase your risk of being involved in a serious accident.

Nitrous oxide injection systems allow you to improve the car’s performance and boost take-off speeds. Many states have outlawed nitrous systems, and insurance companies will increase your premium if you have them.

In some cases, your insurance may even refuse to cover the risk.

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Risk of Theft Is a Concern

Anything that makes your car more appealing also increases the risk that it will be stolen. As you make your car stand out from the crowd, you may also be turning it into a greater target for chop shops.

The chance of theft is another reason why insurance companies may increase your insurance premiums as the car is modified.

Additionally, keep in mind that the insurance company looks at more than just the book value of the unaltered car. When you report the modifications, those changes are taken into account with the value.

If you’re raising your car value, then you’re also raising the company’s potential liability. This cause and effect can lead to more costly premiums, but you can keep the costs down by shopping around for different plans.

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Positive Changes are Welcome


Just as some modifications can increase performance or the risk of theft, there are also positive changes that will make your car safer. Invest in these and you just might reduce your premiums accordingly.

These modifications include:

  • Parking sensors
  • Alarms
  • Rear view cameras

If you’ve made any change that potentially lowers your risk of accidents or injuries, then you should let your insurance company know. There’s a chance that it will help you net some nice discounts.

You can also mention these alterations when you’re shopping around for a new insurance plan.

Always Notify the Insurance Company


You should always alert your insurance company to modifications and upgrades. It doesn’t matter if you’ve invested in fancy new wheels or a more powerful engine; your company cannot adequately protect your investment without accurate information.

Inform the company of the changes so that they can reassess your risk levels and set corrected rates. Otherwise, your modifications won’t be covered in the event of an accident.

In some cases, the company can even refuse to cover claims completely or cancel the entire policy.

Depending on the changes that you’ve made, you may be forced to look for specialty insurance that will adequately cover your needs.

Whether you’re going with a traditional plan or you’re shopping for something specific, you can save on the rates by comparing different companies.

Another option is to accept a policy with exclusions. The insurance company will cover the stock value of your car, and you’ll cover the additional cost of the modifications yourself.

A policy with exclusions can help you keep the rates down while still allowing you to customize your ride.

You can also talk to your agent ahead of time to ensure that items are going to be covered before you make the investment.

Find the Right Coverage With a Little Research

You don’t have to give up on your desired modifications in order to have affordable auto insurance. Whether you agree to special riders or go with a custom plan, you can save money by looking around for the best rates.

Compare plans and rates to find a company that can meet your needs and gives you the ideal coverage levels.

Start comparison shopping today for better auto insurance rates by entering your ZIP code below!