What are some modifications that affect your car insurance?

Modifications affect car insurance because they change the value and risk of the car. Modifications that affect car insurance are performance-enhancing, aesthetic, entertainment, or safety.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 20, 2021

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Here's What You Need to Know...

  • If you don’t report modifications, they may refuse to pay when you have an accident or damage your vehicle
  • Insurance companies call it “material misrepresentation” when you fail to notify them of changes made to your vehicle
  • Some drivers choose to add one or more safety modification when modifying for performance or aesthetic purposes

Do you have to declare modifications for car insurance? When you apply for auto insurance coverage, the insurance company assumes that your vehicle features are standard for the make, model and year of release.

If you don’t inform them that you’ve upgraded the tires or changed to a more powerful engine, they will assume that you’re using factory-recommended tires and are still driving on the vehicle’s original motor.

Some consumers view this as an excuse that insurance companies use to get out of paying substantial claims, but there are cases where drivers modify their vehicles without notifying their insurance carriers because they don’t want to pay higher premiums.

It’s always in your best interest to report modifications even if you don’t think they’re substantial enough to impact your premium to ensure that the insurance company has no reason to deny coverage on any claim that you may file in the future.

Some modifications are more likely than others to cause a substantial increase in your rate, and this guide will help you determine the level of risk for any modifications you may consider.

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Performance-Enhancing Modifications


Most modifications that increase your insurance premium substantially will fall into this category.

Since they’re designed to make your vehicle move faster or otherwise perform above the standards of a typical vehicle, you can expect your insurance company to see them as a heightened risk.

Some modifications that would fit into this category include:

  • Enhanced exhaust systems
  • More powerful engines
  • Nitrous oxide injection systems
  • Performance tires

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Aesthetic Modifications

These modifications are designed to change the appearance of your vehicle, and most are concerns for your insurance company because they are known targets for thieves.

The most common modifications include:

  • Tinted windows
  • Fancy rims
  • Spoilers
  • Side skirts
  • Extra headlights

Entertainment Modifications


These modifications are added to increase comfort for passengers, but insurance companies may see them as distractions that increase your chance of causing an accident.

The most common modifications involve entertainment systems include:

  • Television screens
  • DVD or Blu-Ray systems
  • Stereo systems with large speakers
  • Sub woofers and related equipment
  • Bluetooth systems (not added by the manufacturer)

Safety Modifications

These modifications are actually appreciated by many insurance companies, and they can help reduce your insurance premium. Some of the more common safety modifications include:

  • Alarms
  • Back-up cameras
  • Hands-free cellular systems
  • Immobilizers
  • Tracking devices

The idea is that they may keep their insurance premium lower by enhancing the safety of the vehicle along with the performance and appearance.

This may or may not work, but it is something to consider if you want to complete a modification that you know will increase your insurance premium.

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Disability Modifications

Drivers with disabilities often require vehicle modification if they are to drive safely and comfortably.

These modifications vary from the addition of specialized equipment to design changes that impact the overall appearance and functionality of the vehicle.

These modifications are often expensive, and research has shown that consumers pay out of pocket for more than 70 percent of all medically-required vehicle modifications.

Drivers must then absorb the cost of higher auto insurance rates as a result of their modifications.

Some modifications are considered more of a risk than others, so most drivers can find a solution that doesn’t increase their insurance rate dramatically.

Minor Disability Modifications

There are many state-sponsored assistance programs that help drivers secure vehicle modifications needed to drive to work and enjoy healthy lifestyles, and they often categorize modifications as minor or major.

Minor modifications typically include the addition of specialized equipment without changing the basic structure or functionality of the vehicle such as:

  • Air bag removal or disconnection
  • Emergency backup systems
  • Exterior wheelchair lifts
  • Hand controls
  • Parking brake extension lever
  • Power gear selector
  • Power seats
  • Reduced-effort brakes
  • Spinner knobs

Major Disability Modifications


Modifications placed in this category typically change the structure or functionality of the vehicle in a substantial way.

These modifications are more likely to contribute to high auto insurance rates because these changes increase the replacement value of the vehicle. Some major disability modifications include:

  • Left foot accelerators
  • Lowered floor
  • Raised door openings
  • Raised roof
  • Removable driver seat
  • Suspension system modification

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Are your modifications medically necessary?

If you’re modifying your vehicle due to a medical condition or injury, your state may allow you to complete a driving assessment.

Professionals review your reasons for seeking vehicle modification as well as your vehicle, and then they give you a prescription for needed modifications.

If this isn’t available in your local area, you can also go to your doctor and ask for a letter stating why you need modification to drive safely and comfortably.

Show this documentation to your insurance company along with any verifying documentation that they request, and you may receive a more affordable insurance premium.

Questions to Ask Prior to Modification

There are two questions that you should ask when assessing whether you want to go through with a vehicle modification:

  • Will this modification increase my risk of causing an accident?
  • Will this modification increase my risk of theft or vandalism?

These questions reflect the primary concern of your insurance company, so they can help you see the modification from the company’s perspective.

If the modification is designed to make your car go faster or accelerate faster, than the insurance company will assume that you plan on driving faster.

Fast driving does increase your risk of causing an accident.

If you put on those fancy rims or add an advanced stereo system to your vehicle, then the insurance company may decide that your vehicle is more likely to get broken into, and that means they are more likely to receive a claim for the replacement of those items.

If you decide to go through with the modification, make sure to contact your insurance company and report the modification immediately.

If they increase your rate, you can compare insurance quotes online to find a more affordable policy.

Start comparing car insurance rates now by entering your zip code in our FREE tool below!

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