How Modification Impacts Your Car Insurance Premium


As you may know, there are factors that affect your car insurance premium. Usually, insurance companies decide car insurance premium, factoring certain things. Apart from the basic premium determining factors, modifications done to the car are taken into consideration as well.

There are two areas where the insurer assesses car insurance policy:

  • Risk of theft: Modifications that are done to increase the performance, which eventually increases the chance of your car damaged or stolen.
  • Risk of an accident: Modification to enhance the look and performance is considered as a higher risk. These especially include body-kits, spoilers, engine changes, sports seats, etc.

What modifications affect your car insurance premium?

These below modifications are considered at the time of deciding car insurance premium:

  1. Engine Modifications

The modification to increase the performance of the engine has to be informed to the insurer. when accelerator speed is subject to increase the risk of an accident, these things should be in their notice.

As overtaking, high speed etc. are the reasons for road accidents, thus adding turbo or supercharger can lead to your insurance cost.

  1. Car Stickers

 Many insurance providers consider any sticker stuck on the body of the car as a part of the modification. So in case you think of applying one, make sure with the insurer that if it affects the car insurance premium or not. However, the different insurer may come with a different rule for modification. For instance, your TATA AIG car insurance may consider it as a modification, while HDFC ERGO car insurance may not. Better check with your insurer first and then go for it accordingly.


  1. Breaks and Suspension

Changes in crucial parts need assessment by the insurance provider. Car parts such as break or suspension play an important role in the overall functioning of the vehicle, while any change needs to be updated.

  1. Car Interior

Changing car interiors like steering, sound system, pedals, seats etc. will lead to insurance hike. Also, you will have to inform the insurer about it.

  1. Paintwork

Changing your car paint you can give it a fine look. The eye-catchy designs can completely change the overall look of it. this might consider one of the modification by the insurer while deciding the premium.

  1. Wheel Modifications

 Wheels modification aids to the car look and value. Whenever you get it done, inform the insurer without a fail.

  1. Non-standard Engine Change

The engine is one of the main factors that aid to your car insurance premium. As you don’t wish to drive with a non-standard engine, you amend it. non-standard engine leads to the risk of a car breakdown or an accident. As the quality of the product and wear and tear may vary, the insurer needs this information to do that premium calculation.

What Modifications do not Affect your Car Insurance?

Modification in any means will affect car insurance premium. However, certain changes affect the premium less, if they indirectly decrease the risk of accident or theft. For instance- at the time of HDFC car insurance renewal, the insurer may not hike the premium because it doesn’t consider parking sensor as a modification. As it protects the vehicle from getting damaged while in the parking lot, this kind of modification is not consider as harmful to the vehicle.

Why is it Important to Declare Car Modification?

Letting your insurer know about the modification you made to the vehicle is a good sign to remain in the vows of the insurance contract. In case of a second-hand plan when you are not sure enough about the work that may have been done, you can take help from getting your vehicle examined by a mechanic.

In case you fail to disclose about a modification, no matter whether it is intentional or accidental, the claim application will be denied by the insurer if it gets to know about it later. That’s why it is essential to keep your insurer in the loop while making further changes to the vehicle. In case your insurer rejects or cancels your policy, you may have to bear an exorbitant premium to get it covered in the future.

Wrapping it Up!

You have full freedom to modify your vehicle, provided you are aware of the cost involved and you’ve informed your insurer about the same. This will aid in deciding your car insurance premium considering the modification you do. It is advised not to hide about any such modification. This may hike the premium a little bit but will save you from facing a claim rejection in the future.