Modified Car Insurance – What You Should Know

Anyone who has ever driven a modified car knows that insuring it can be complicated. If your car is a high performance vehicle to begin with, you're probably already paying higher rates than you would for a sedan, minivan, or SUV, but any changes to the car make it that much harder for the insurance company to estimate value or assess risk. While finding insurance for modified cars is getting easier, there are still a few things you should know.

Most important, you need to understand that insurance companies see all modified cars in one of two categories: street racer, and show cars. Of the two, street racers are much more difficult to insure.

Show cars can be covered by collectible policies that are extremely inexpensive, but come with major restrictions, including annual mileage caps, age restrictions for the insured driver (usually over 21, sometimes over 25), and storage requirements. Street racers, on the other hand, come with a higher likelihood of being used and abused, driven by young drivers, parked on the street, and generally not treated with the same level of care. To insurers, this makes them a greater risk.

Once you understand that collectible insurance isn't going to work for a street racer, you can move on to the next step in finding insurance, and whether you opt for an expensive specialty company that focuses on elite driving machines, or shop around for a more mainstream insurer who will take your car, you must disclose any and all modifications. Undisclosed mods may not only limit the value of your car should it be in an accident, they could actually void your policy completely. Discuss all of your modifications, completed or planned, with your insurance agent before signing anything, and, if possible, provide examples of cars like yours – same make and model year – with similar modifications – selling for more than you believe your vehicle is worth. If they're in worse condition, that's to your advantage.

You should also understand that not all modifications are treated the same way. The addition of alloy wheels will increase the value of your car, but it won't necessarily impact your insurance premium, while an engine modification will almost always cost more in insurance, and things like performance exhaust systems or body kits are almost always taken on a case-by-case basis.

While modified vehicles don't generally qualify for any special discounts, you can – and must – lower your risk profile. It may not lower your premium, but it will lower the chances of being in an expensive accident. The steps you can take to improve the way your insurance agent sees you include:

• Drive more carefully. Obey traffic laws, never speed in residential areas, and always use your seatbelt.
• Always lock your car when you park it, and if you have access to a garage, use it.
• Consider taking a performance driving class, where you'll learn techniques to avoid sliding on wet pavement or locking your brakes when you stop.

While these tips won't necessarily have a direct impact on your insurance premium, they will help to improve the reputation of all drivers of modified cars, which in turn put all of them into lower risk profiles, lowering premiums for all performance car owners.