Do car mods affect insurance?
Yes, modifications to your car will affect your insurance in two ways.
Endorsement or custom policy: Many modifications can’t be included in a standard auto insurance policy. For smaller modifications, many insurance companies allow you to add an endorsement to your policy to cover the changes to your car. If your exhaust system modification is significant, you may be required to purchase a custom policy or, potentially, denied coverage, so make sure you check with your insurance company before making any changes to your vehicle.
Change in rates: Some modified cars have expensive parts and need specialized repairs, which means higher repair costs after an accident. When it comes to a modified exhaust, you should expect to pay a higher rate if the modification makes your car faster or more powerful. On the other hand, a modification that makes your car safer, like an anti-theft device, may lower your rates.
What's defined as a car modification?
By definition, a modified vehicle is any vehicle which has changes made to it after being manufactured that changes or alters the performance or appearance of the motor vehicle from the original manufacturer’s specifications.
Changing parts in your exhaust system counts as a modification, but even smaller, less obvious changes qualify as modifications. For example, having your car painted a different color counts as a modification.
There are a number of common vehicle modifications that require an insurance endorsement or a custom policy, including:
Custom exhaust manifold
Accent lights, aftermarket LED headlights, etc.
Custom paint job, murals, or other permanently affixed decor
Electronic equipment (stereos, TVs, speakers, etc.)
Turbochargers and other enhancements designed to increase your speed
Custom tires, hubcaps, or spinners
Custom spoilers or grilles
Do performance mods increase insurance?
Performance modifications, like suspension enhancements or engine turbochargers, almost always increase the cost of your insurance. Some performance mods may require you to purchase a custom insurance policy and make it hard to find an insurance company willing to cover you, so think carefully before you add performance parts to your car.
What modifications can lead to insurance discounts?
A modified car usually increases your insurance premium, but not always. There are some types of vehicle modification, like car alarms or rearview cameras, that can potentially lower your insurance rate, including:
Anti-theft devices (alarms, steering wheel locks, etc.)
Enhanced braking systems
Lane departure warning system
Adaptive headlights and running lamps
Exhaust mods aren’t usually the type of modification that earns you a discount on your insurance, so expect to pay more to cover an aftermarket exhaust system.
Do you have to tell your insurance company about car mods?
Yes, you need to tell your insurance company about any modifications you make to your car, including exhaust mods, because they can impact how much your car insurance company will pay out in a comprehensive or collision claim.
Some things, like a custom paint job, affect how much your insurance company will have to pay out in the event your car is damaged or stolen. Some mods may need to be excluded from your policy if the value is so high that your insurance company won’t cover to replace or repair it.
Also, modifications that significantly increase the performance of your vehicle or include illegal aftermarket parts may not be covered, and if you don’t tell your insurance company about the modifications and you are at fault in an accident, there is a possibility your claim could be denied.
A mod that makes your car much faster or more powerful could significantly increase the amount of damage caused in an at-fault accident and will likely affect the cost of both full coverage car insurance and liability only policies.
What are the types of insurance for modified cars?
There are two different ways to insure a modified car:
Supplemental coverage/custom car insurance: Many insurers offer endorsements that provide supplemental coverage for cosmetic modifications and aftermarket components (aftermarket exhaust, LED headlights, etc.).
Classic car insurance: Classic cars or collector vehicles require special insurance policies. For example, GEICO offers classic car insurance for cars that are at least 25 years old, new exotic cars like an Aston Martin, antique cars, replicas of famous vehicles like the Batmobile, and classic military vehicles, fire trucks, and other specialty cars.