Modified Car Insurance: What To Know (2023)
If you modify your car with aftermarket parts, you’ll need coverage that goes beyond a traditional auto insurance policy. In this article, our Guides Auto Team will examine different types of vehicle modifications and how they’re covered under an auto insurance policy. We’ve also researched and ranked the best car insurance companies so you can choose the best match for your modified car insurance coverage needs.
Modified Car Insurance: The Basics
With so many ways to modify a car, there’s no single best option for modified car insurance. Put simply, changing a vehicle’s factory parts has a significant impact on its value. You’ll likely need to add a customization or an endorsement to your insurance policy to cover modified parts.
In this case, an appraiser may need to list and assign values to any custom parts that you want covered. From there, you and your insurer can create an agreed value policy that offers adequate coverage for all your vehicle’s modified parts on top of your standard coverage.
Common Types of Car Modifications
These are a few of the common car modifications drivers cover with additional insurance:
- Rims
- Custom grilles
- Anti-roll or anti-sway bars
- Custom paint jobs
- Custom wheels
- Running boards
- Turbocharger
- Truck bed liners
- Tinted windows
- Engine turbochargers
- Fuel system upgrade
- Various changes to the engine, exhaust or suspension
Insuring a Previously Modified Vehicle
Providers typically calculate car insurance rates based on a vehicle’s factory equipment. If you purchase a car that has previously been modified, you’ll need to inform your insurance company before adding it to your policy. It’s best to compare car insurance quotes from several providers to not only get the best rate, but also make sure the companies you’re considering will cover modified vehicles.
Functional Modifications
Some vehicle modifications are made purely for functionality or mobility. Floor-mounted steering, left-foot accelerators, wheelchair ramps and siren detectors for those with hearing impairments are examples of adaptive modifications made for drivers with disabilities. Insurance companies typically don’t distinguish between mobility-focused changes and cosmetic or performance-based alterations when determining rates.
Modified Car Insurance Costs
Nationwide, the average cost of auto insurance for a standard car is $1,730 per year for full coverage and $635 per year for minimum coverage. These rates are for a 35-year-old married driver with good credit and a clean driving record. However, adding aftermarket parts generally results in higher coverage rates, as insurers will need to cover the cost of specialized parts in the case of damage to your vehicle.
Most modifications will increase how much you pay for coverage, but this is especially true if the modifications boost your car’s performance. This is because insurers view turbocharged cars as higher-risk properties.
Customized vehicles also tend to stand out to car thieves. The risk of theft is a key consideration for insurance companies when it comes to covering modified cars. High-profile additions to a vehicle, such as flashy chrome rims or powerful stereo systems, often lead to more insurance claims — which leads to higher coverage rates.
However, certain modifications, such as added safety features, can actually bring your insurance premiums down. Many insurers offer special car insurance discounts for installing safety equipment in your vehicle.
Car Insurance Cost Factors
Along with any mods or customizations made to your vehicle, insurers use the following criteria to determine auto coverage prices:
- Age: Young adults and teen drivers pay higher rates than motorists 30 years of age and older.
- Gender: The gender listed on your driver’s license plays a part in how much you pay for auto coverage, with males typically paying more than females.
- Marital status: Married drivers usually pay lower insurance rates than single ones.
- Credit history: Insurance companies consider financial responsibility when setting coverage rates. Lower credit scores yield higher car insurance premiums.
- Driving history: A recent speeding ticket, at-fault accident or driving under the influence (DUI) conviction will increase auto insurance rates.
- Location: Population density and the frequency of car insurance claims where you live are key factors in determining coverage rates.
- Vehicle type: The value of your car and its engine size affect insurance rates.
Modified Car Insurance: Conclusion
In most cases, modifying a vehicle results in higher insurance costs. The exceptions to this rule are anti-theft devices, blind spot detectors and other safety add-ons. If you want to customize your car or purchase a previously modified vehicle, be sure to ask your insurance agent about how much more you’ll pay for coverage.
Top Auto Insurance Recommendations
When beginning your search for affordable, high-quality auto coverage, we recommend getting quotes from the following top-rated car insurance providers:
#1 State Farm: Editor’s Choice
The largest auto insurer in the U.S. according to the National Association of Insurance Commissioners (NAIC), State Farm earned our Editor’s Choice award in our 2023 industry review. Our team ranks State Farm as the top auto insurance provider thanks to its variety of coverage options and low rates for both liability insurance and full-coverage policies.
State Farm gives customers the chance to save through its Drive Safe & Save™ telematics program. This program monitors your driving habits, and can save you up to 30% upon policy renewal if you are a safe driver.
Keep reading: State Farm insurance review
#2 USAA: Low Rates for Military
USAA offers consistently low rates for most types of drivers, although its policies are available only to active military, veterans and their immediate families. If you qualify for auto coverage through USAA, you can take advantage of the company’s affordable rates and excellent customer service. USAA has been in business since 1922 and is the fifth-largest auto insurer in the nation, according to the NAIC.
Keep reading: USAA insurance review
#3 Geico: Affordable for Most Drivers
Geico is the second-largest auto insurer in the U.S. According to the NAIC, the company wrote over $37 billion in insurance premiums in 2021. Geico’s solid customer service reputation, widespread availability and affordable rates make it a great option to consider for many drivers. Along with standard coverage options, Geico offers rideshare insurance and mechanical breakdown coverage.
Keep reading: Geico insurance review
Modified Car Insurance: FAQ
Below are frequently asked questions about modified car insurance.
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
- Cost: Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
- Coverage: Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Reputation and experience: Our research team considered market share, ratings from industry experts and years in business when giving this score.
- Availability: Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
- Customer experience: This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
Our credentials:
- 800 hours researched
- 45 companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
