Car Insurance for Modified Vehicles: What You Need to Know

What Is Modified Car Insurance?

Modified Car Insurance refers to a policy that takes into account non-factory changes made to a vehicle. These modifications could be:

Key factors influencing premiums:

• Performance modifications like adding turbochargers, engine remapping, and suspension upgrades.

• Aesthetic modifications, including body kits, spoilers, alloy wheels, and custom paint.

• Functional modifications, like infotainment systems, anti-theft devices, and the installation of CNG or LPG kits.
   

Policyholders are encouraged to notify their insurer of such changes, as per the IRDAI. By doing this, you can ensure that your coverage remains in effect and that the IDV for the modified car is updated accordingly. Failure to report such significant changes may affect the processing or settlement of a claim. This is where customised Car Insurance comes in, providing tailored coverage for certain kinds of cars.

 

How Do Modifications Affect Insurance Premiums?

Insurers calculate premiums based on risk, and car modifications can raise or lower that risk.

Key factors influencing premiums:

1. Type of modification

Performance upgrades (e.g., engine tuning) usually raise premiums due to increased speed and accident risk. Safety additions like certified anti-theft devices may reduce premiums.

2. Value increase

Modifications can raise the IDV for modified cars, which means higher coverage but also a higher premium.

3. Likelihood of theft
High-end rims, custom interiors, or rare accessories are attractive to thieves, which increases the insurer’s liability.

4.Regulatory compliance

The only modifications deemed legal are those authorised by the Automotive Research Association of India (ARAI). Any unauthorised or unlawful modifications may render your Car Insurance invalid.
 

How insurers assess risk:

Insurance companies assess the reported modifications by:

• Examining the images and modification expenses.

• Consulting surveyors or engineers for high-priced upgrades.

• Modifying the IDV and re-evaluating the parameters of coverage.
   

Modifications that go unreported may lead to partial settlements or outright rejections of claims. Be open and honest about your changes at all times.
 

How To Get The Right Insurance For Your Modified Car

Taking these important steps can help you get the right Car Insurance for customised vehicles:

1. Keep track of and record all changes

Keep all invoices, certifications, and receipts for all modifications. These act as evidence and aid in determining an updated IDV for the car.

2. Pick an insurance provider who is well-versed in customised cars.

Certain insurance companies are more qualified to evaluate and insure customised vehicles. Although the majority of regular policies could restrict coverage, some companies provide customised plans.

3. Get the modifications endorsed

Notify your insurance company and make sure your policy has an endorsement added. The insured value now includes the modification, which is acknowledged by this endorsement.

4. Evaluate IDV adjustments

Request a revised IDV for modified cars from your insurance provider. In the event of complete loss or theft, an accurate IDV guarantees an appropriate reimbursement.

5. Opt for add-ons

For better protection, choose add-ons like:

• Zero Depreciation cover (to protect modified parts)

• Engine Protection cover

• Personal Belongings cover

Tips to reduce premium:

• Install security devices authorised by ARAI.

• Limit your modifications to practical rather than aesthetically pleasing ones.

• Steer clear of performance or race-style modifications that imply significant risk.

• Keep accurate service logs and pictures of any modifications.

Conclusion

Many Indian car enthusiasts take great delight in owning a customised vehicle. Great modifications, however, come with greater insurance responsibilities. Protecting your investment in your car is more critical than cost when it comes to getting the most suitable insurance for modified cars.

You can safeguard both regular and customised cars with Shriram Car Insurance's  affordable and flexible coverage options. Whether it's a premium infotainment system, an LPG kit, or a completely renovated interior, Shriram enables policyholders to report modifications transparently. You can ensure that all your coverage requirements are met with add-ons like Engine Protect and Zero Depreciation. Discover the adaptable options provided by Shriram Car Insurance, created with today's Indian driver and car owner in mind.

 

FAQs

1. Do all modifications increase Car Insurance premiums?

No. While performance upgrades may raise premiums, safety-related modifications like ARAI-approved, anti-theft devices can sometimes lower them.

 

2. What happens if I don’t disclose modifications to my insurer?

Your claim could be rejected, or you may receive only partial compensation. Disclosure is critical for valid coverage.

 

3. Are there insurers that specialise in modified car coverage?

Yes. While most general insurers provide standard plans, some are better equipped to handle customised vehicle assessments and can tailor coverage accordingly.
 

4. Will adding a CNG kit affect my premium?

Yes, slightly. However, if the kit is ARAI-approved and declared, most insurers will endorse it with a marginal increase in premium.