Modification and your car insurance policy
‘The only thing that is constant is change’, wrote Heraclitus, a Greek philosopher. He was right. That is why many of you make changes to your home, your wardrobe, your lifestyle, etc. In fact, many car owners also make changes in their cars. They fit various accessories or modify their cars as per their requirements. Major modifications to the car are done for the following reasons –
1. To change the look of the car – This is done more with a view to make the car look more trendy and stylish thereby reflecting the fashion sense of the owner
2. To make the car suitable for a disabled user – If the intended passenger of the car is disabled, modifications might be made to enable easy mobility of the disabled individual
3. For suiting the driving terrain – if the car is primarily driven off-roads, changes can be made to the car’s tyres for suiting the driving terrain
4. For improving the performance of the car – this is relevant when speed boosters or other performance oriented modifications are done to the car
5. For changing the fuel type – in many cars, CNG kit or bi-fuel tanks are installed for fuel efficiency. This is also a type of modification
Modification and insurance
If the car is modified, it might change the value of the car. If the value of the car changes the premium would be affected. Therefore, in many cases of modification, the car insurance policy should also be modified. The policy should include details of the modification done, the increased value of the car and the subsequent increase in premium. So, if you are modifying your car in any way, you should consider modifying your car insurance policy as well. The following things should, therefore, be done in such cases –
• Inform your insurance company about the modification being done or already done on the car
• Submit all the relevant bills, documents and other paperwork which show the details of the modification and its cost
• The insurance company would, then, analyse whether the said modification has increased the Insured Declared Value (IDV) of the car or not.
• If the IDV is supposed to be increased, the company would increase the IDV and fix the new increased premium.
• You would, then, have to pay the additional auto insurance premium based on the increased IDV.
If you do not inform the insurance company of the modification, your car insurance policy does not reflect the said modification of your car. In case of any claim when the car is damaged and is sent for repairs, any damages sustained by the modified parts of the car would not be covered. The insurance company would, therefore, not pay for any damages incurred on any modifications. Moreover, if the insurance company does not record the said modification, you might land up in legal trouble in case you face any legal liability.
Now you know how modifications in car can affect insurance policy. So, do whatever modifications you want on your car but remember to get the same updated in your car insurance policy. You might be required to pay an additional premium but your modified car would be completely covered against any unforeseen contingencies.
Read more to find the factors affecting premium of your car insurance policy
Read more about types of car insurance covers and their benefits.