Car modifications can be an exciting way to personalise your vehicle, enhance its performance, or improve its aesthetics. However, modifications can significantly impact its insurance premium. This is an important aspect that every car enthusiast should know, as it can substantially impact their financial planning.

Car insurance in India is a vehicle insurance policy designed to protect car owners from financial losses caused by accidents, theft, or other damages to the vehicle. It also covers third-party liabilities where the policyholder is responsible for injuries or damages to other people or their property.This blog explains how car modifications can influence your car insurance and what you must consider to ensure you are adequately covered.

Understanding Car Modifications

Car Modifications refer to any changes made to your vehicle’s original specifications. These can vary from performance enhancements, such as engine upgrades, to cosmetic changes, like custom paint jobs or new alloy wheels.

Types of Car Modifications

Here are some main types of car modifications people often prefer:

Exterior Modifications

1. Changing how your car looks on the outside is very popular. That includes new paint jobs or adding cool graphics. You can also add different lights to make your car look more attractive.
2. Other exterior changes include modifications to the car’s body, such as flared wings, bonnet, panels, or tyres. These changes don’t directly affect the car’s performance.

Interior Modifications

1. Interior changes can involve updating the dashboard’s look and car seats for a more aesthetic appeal.
2. Other common interior modifications include adding a new music system, upgrading the AC, or installing additions like Bluetooth and dual horns.

Performance Modifications

1. Some modifications are made to improve the car’s performance. For example, air filter, engine, or exhaust system changes can improve the car’s performance.
2. Examples include:

• Addition of nitrous oxide to boost speed
• Using broader tyres for better stability
• Changing the lock system or installing an anti-theft device for improved security
• Changing the fuel type, such as installing a CNG kit in a petrol car

Effects of Car Modifications on Car Insurance Claim

Remember, there are 2 main car insurance policy types: Third-Party Liability (compulsory by law) and Comprehensive Car Insurance (recommended). Modifications to your car will only affect a Comprehensive policy since it covers damage to your own car.

When you get a Comprehensive Car Insurance Policy, the insurer lists different details about your car and calculates the cost/premium. If you modify your car, its value might increase, so you must notify the insurance provider about the changes.

Suppose you don’t tell the insurance provider about the changes, and your car gets damaged by a natural disaster. In that case, the insurer might either reject your car insurance claim or only pay based on the original parts covered by the policy.

By informing the insurer about the modifications, they can inspect your car again, account for the changes, and update your policy accordingly.

Modifications Not Affecting Car Insurance Premiums

Not all modifications to your car will affect your insurance policy. For example:

1. Changing car seat covers
2. Adding alloy wheels, lights, etc.

Modifications that do not increase the risk of accidents or theft of valuable parts typically won’t affect your car insurance policy.

Car Modifications the Insurer Must Know

Here are the changes you should inform your insurer about:

1. Body Alteration: Modifying the car’s body for a tougher look or to increase its load capacity can change its purpose, so inform your insurer.
2. Engine Changes: Any modifications must be reported since the engine affects the car’s power and speed.
3. Braking and Suspension Systems: These are crucial for safety, and changes to these systems must be communicated to your insurer.
4. Interior Upgrades: Adding expensive items like a high-end music system or advanced air conditioning can affect your insurance premium. Changes to the steering wheel, dashboard, and upholstery should also be reported.
5. Wheel Changes: Upgrading your wheels can make your car look better and increase its value, raising the premium.
6. Car Painting: Special paint jobs or designer paintwork can impact the car’s premium.
7. Modifications for Disabled Users: Alterations to make the car more accessible, like swivel seats, automatic transmission, or power steering, need to be reported.
8. Changes for Sports or Adventure: Your insurer should be informed of modifications for racing, cross-country trips, or adventure purposes.

Legal Car Modifications in India

Certain modifications are legal in India, provided they comply with the guidelines set by the authorities. It is essential to ensure that your modifications are legal to avoid complications with your car insurance. Some permissible modifications include:

1. Alloy Wheels: Upgrading to alloy wheels is generally acceptable.
2. Upholstery Changes: Changing the car’s interior, like seat covers and floor mats, is permissible.
3. Basic Aesthetic Enhancements: Cosmetic changes like decals or wraps that do not alter the car’s structural integrity.

Final Word

Car modifications can significantly impact car insurance premiums in India. While they allow you to personalise and enhance your vehicle, it is essential to understand the implications of your car insurance.

Always disclose all modifications to your insurer, ensure they are legal, and consider specialised car insurance policies or add-ons to provide adequate coverage. Doing so lets you enjoy your modified car without compromising on insurance protection.

Remember, the key to a hassle-free car insurance claim process lies in transparency and ensuring that your policy accurately reflects the value and specifications of your modified car.