It’s not uncommon for car owners to want to make modifications to their car, especially when they have the money to do so. There are many upgrades that can be added to exotic cars. However, owners need to take special care with the types of modifications they attach to their car, as they can create problems with your car insurance policy, especially when you consider the ways that classic car insurance differs from regular car insurance.
When a car owner applies for an insurance policy, the provider will usually ask applicants whether modifications have been made to the car. The provider will then quote an estimate based on the following factors:
- Car value
- Susceptibility to theft
- Likelihood of getting involved in a crash
The general idea here is that whether your car’s modifications cause your insurance premiums to increase or decrease depends on the effect these modifications have on your car in terms of value and safety.
For example, if the modifications made to the car make it more dangerous to drive, the risk that the car crashes (and an insurance payout is made) increases. In order to offset this increased risk, insurance providers will likely increase insurance premiums.
It’s also important to be honest in declaring the modifications you’ve installed on your car. Since the declaration of modifications becomes a strong basis for risk calculation, the failure to report all modifications will effectively void the insurance policy, which will mean that the erring policyholder will not be able to file a claim.
It’s also for this reason that it’s important to have a mechanic check your car for any modifications if you purchased a used car. It’s important to understand the failure to declare all modifications, whether intentionally or by mistake, will have a significant and adverse impact on your insurance policy if it doesn’t void it outright.
Safe Upgrades
As a general rule, any modification that makes your car safer would not have an impact on your insurance premiums. Some modifications may even lower your insurance premiums. Some examples of these upgrades are:
- Engine change - Swapping to a less powerful engine or one that has better safety features lowers the risk factor of your car, which lowers your premiums.
- Body kits - Some body kits improve the structural integrity of your car, which makes it less likely to sustain damage. If your car does get into an accident, parts that can mitigate damage also help reduce insurance premiums, which is also why most people prefer carbon fiber kits like these stylish accessories for Audi a6
- Improved brakes - A high-performance brake system can reduce your insurance premiums by 10% to 15% because of the much better control and braking power added to your car. This is one of the best modifications to your car premium-wise and performance-wise.
The changes you make to your car alter its road characteristics and thus, its risk factor. Consequently, it’s important to communicate whatever changes you make to your insurance provider to ensure that your car is covered by insurance. In some instances, they may even advise you on which modifications to make that will help lower your insurance premiums.
