Know how car modifications impact your car insurance


17 Aug 2023

The Influence of Vehicle Modifications on Insurance Costs

Many car enthusiasts opt for modifications to enhance performance, aesthetics or functionality. While these changes can be exciting, it's important to understand how car modifications can impact your car insurance.

Types of car modifications

Car modifications can range from simple cosmetic changes to extensive performance upgrades. Some common types include:

  • Cosmetic modifications

These include changes to the car's appearance, such as adding decals, new paint, spoilers or custom rims.

  • Performance upgrades

Performance modifications involve enhancing the engine, suspension, exhaust systems or brakes to improve the vehicle's speed, handling or power.

  • Interior changes

Alterations to the car's interior, such as installing new audio systems, seat covers or entertainment units.

  • Functional modifications

Adding practical features like roof racks, tow bars or upgraded lighting systems.

Impact on car insurance

  • Premium changes

Modifications that enhance performance or make the car more valuable could lead insurers to perceive a higher risk. Car modifications can lead to increased premiums. As a result, your premium might rise to account for this increased risk.

  • Assessment of risk

Modifications that might affect safety, stability or visibility could be seen as increasing the likelihood of risks such as accidents, leading to higher premiums.

  • Valuation changes

It's important to adjust the insured declared value (IDV) to reflect the car's enhanced value accurately. Modifications can increase your car's value.

  • Coverage adjustments

You may need to add specific coverage for your modified parts or systems. Some modifications might not be covered by a standard policy.

  • Lack of coverage

If your modified car is involved in an accident and you haven't updated your insurer, they may not cover the damages. Failure to disclose modifications can result in denial of claims.

Disclosure and documentation

  • Hiding modifications could lead to coverage denial or policy cancellation.

  • Keep records of all modifications made to your car, including invoices, photographs, and details of the changes. This documentation will be useful during the claims process.

Tips for insuring modified cars

  • Quality workmanship can positively impact your modified car insurance rates. Have modifications done by professional and reputable shops.

  • Some alterations might have a minimal impact on your premium, while others could significantly increase it. Be selective about modifications.

  • Safely storing documentation of modifications and related expenses can help you to claim insurance on modified cars.


Car modifications can bring a sense of uniqueness and thrill to your driving experience. However, it's essential to consider the implications of your car insurance. Full disclosure, documentation and open communication help in navigating the world of modified cars and four-wheeler insurance. While modifications can lead to higher premiums, taking the necessary steps to ensure your modifications are properly covered will provide you with the peace of mind that you can enjoy your customized ride with the right protection in place. To know more, visit kotak general insurance.

Related blogs

bike insurance coverage tips for bike's horn and headlight

things to taken care of while purchasing or renewing bike insurance

bike insurance background checks in india

Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.