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Modified car insurance: Car modification’s impact on insurance
Team AckoMay 4, 2026
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The term "car modification" conjures up an image of a bright coloured, bulky looking car. If you are into sci-fi, you might even think of neon under-glow, a deep turbo-engine sound, and wide tires. But modifications are not limited to aesthetic changes. In fact, modifying your insured car can affect your car insurance policy. Let's discuss how car modifications impact insurance and what you must be aware of before modifying your car.
First, let’s understand more about modifying a car.
Contents
What do people mean when they say they have a modified car?
To modify means to change and in terms of a car, a modification would mean to make changes in the car. As mentioned earlier, modifications are not limited to the look and feel of your car. There could be several options to choose from. Modifications can range from design to performance enhancements.
What are the types of car modifications?
Here is a list of some basic types of car modifications that people prefer.
1. Exterior modifications
One of the most popular types of modification is changing the look of your car. These are exterior modifications. For example, a paint job or visually appealing graphics on the car’s body are common. Then comes the addition of lights. You get unbelievable options and can use your creativity to make the car look more appealing.
Other examples are changes in the car’s bodywork such as bonnet, flared wings, panels, tyres, etc. Such changes do not directly affect your car’s performance.
2. Interior modifications
Changing the look of the dashboard, and car seats can be aesthetic changes of the interior of the car. Adding a music system, making changes in the air conditioner, and adding accessories like Bluetooth, dual horns, etc. come under interior modifications.
3. Modifications that change performance
People also prefer to modify their cars in such a way that gives better performance output. Changes to the car’s engine, air filter, exhaust system, etc. have a direct impact on the performance of the vehicle.
For example,
Adding nitrous oxide to your car’s mechanics increases its speed.
Broader tyres may result in better stability.
Changing the locking system or adding an anti-theft device can improve the security factor.
Another major modification to a car can be converting the fuel type. For example, getting a CNG kit fitted to a petrol car.
After understanding these basic types of car modifications, let’s move on to discuss how they affect your car insurance policy.
How Car Modifications Affect Your Insurance
Car enthusiasts who modify their cars do so mainly either to enhance performance or to give the car a unique look. Sometimes, modifications can lead to changes in your car insurance. Here is a guide to the most common changes and how they could affect your cover:
1. Performance Upgrades
Changes geared towards raising performance such as the addition of turbochargers, engine tuning, or modification of the exhaust system are generally viewed as risky since they increase the chances of accident occurrence. This is why an insurance company is likely to revise your premium upwards. That being said, you need to keep your insurance company updated always on such changes.
2. Suspension and Brake Modifications
When upgrading your suspension or brake systems, your vehicle physically changes and you will therefore behave differently. If you fail to notify your insurer of these changes, it is potentially going to lead to complications at the time of claims.
3. Exterior Modifications
A custom paint job, the addition of a body kit or changes to styling will typically make your car worth more. If such changes are not on the insurer's record, then in the event of a claim you will be compensated inadequately.
4. Audio and Entertainment Add-ons
Installing high-end sound systems or upgrading your in-car entertainment could make your car more desirable to thieves. Your insurance requirements would be met.
5. Wheels and Tires
Introduction of aftermarket wheels or adjusting tire sizes can influence the vehicle's handling and safety levels. These changes should be notified because they can be a deciding factor when the insurer assesses the risk involved in the policy.
6. Security Enhancements
Most modifications are associated with increased risk, but not all are. A high-level security system, such as an alarm, immobilisers, or GPS, can actually lower the chances of a theft. Generally, if these safety changes are presented to your insurer, it is quite common for discounts to be offered.
Not reporting your modifications can result in partial coverage, claim denials, or even policy cancellation. Therefore, ensure you keep your insurance company informed of any modifications you make to your vehicle.
| Type of modification | Example | Reason for change in premium |
| External | Paint job, the addition of front grille, graphics, lights, etc. | A modified car may look more appealing, making it more susceptible to theft. Anything that increases the car’s risk profile will shoot up its insurance cost. |
| Performance | Changes in the car's engine, air filter, exhaust system, etc. | The cubic capacity of a car’s engine is one of the most important factors that determine its insurance premium. Any change that affects the engine’s cubic capacity changes its car insurance premium. Higher the cubic capacity, higher the car insurance premium. |
| Performance | Adding nitrous oxide to your car’s mechanics. | A car driven at a higher speed is vulnerable to accidents and damages. Thus, such changes increase its risk profile and consequently increase the car’s insurance premium. |
| Internal | Addition of accessories like music system, expensive wooden dashboard, etc. | You would want to get expensive parts insured under the policy. This can lead to an increase in car insurance premiums. |
A standard Comprehensive Car Insurance policy does not cover externally-fitted parts (i.e. parts that are not fitted by the manufacturer).
However, you can choose to add them to the policy with the help of an Accessories Cover Add-on. This can increase the premium of your plan.
Some modifications that do not affect car insurance
Not all modifications to the car can affect your car insurance policy. For example,
changing car seat covers
adding alloy wheels, lights, etc.
Simply keep in mind that modifications that do not increase the risk of accidents, or theft of a valuable part will not affect the car insurance policy.
Things to Remember
Always let your insurance company know about your vehicle modifications before you proceed. Not only can they assess any impact on your vehicle, but they can also adjust your premium based on that. It is best not to wait for policy renewal to mention these changes since each insurer has a different way of evaluating modifications.
Simply making a change and not informing your insurance provider first can result in your policy being considered as void. Although sharing your modifications might mean an increase in your premium, hiding them is tantamount to misrepresentation and can cause problems and delays when filing a claim.
Frequently asked questions
Following is a list of some questions related to car modification and insurance. Feel free to get in touch with us by sending an email to [email protected] in case of more questions.
How can I make sure I have adequate coverage for my modified car?
First of all, you really need to tell your insurance company about the modifications you made to your car, even if you think they're insignificant. This way, they can figure out the value of your car and determine the risks associated with it. Also, take a close look at your policy to make sure that any changes, such as enhancements in the car's performance, custom parts, or even additional accessories, are clearly mentioned as covered.
I just got a paint job done on the car. Should I tell my car insurance company about it?
If you choose a new colour for the car then yes you must inform the insurance company. If you are simply repainting the car with the same colour then it is okay to not intimate the insurer.
Are tinted windows allowed in India?
No, fully tinted windows are not allowed in India. The windshield and the rear glass must have at least 70% visibility and other windows must have more than 50% visibility.
One of the family members has recently suffered a disability, and we had to modify the car to make it more accessible. Should I inform the insurance company about this modification?
Yes, you must inform the insurance company about any major modifications. It is most unlikely that a modification of this kind will increase the premium. But, the premium will mostly decrease as per the terms and conditions of the insurance company.
I am an art enthusiast and wish to cover the entire car body with graffiti. Will this increase my car insurance premium?
Your car insurance premium might not get affected due to the graffiti but you must inform the insurance company about this change.
What happens to car claims if the insurance company is not aware of modifications?
An insurance company insures a car after considering all the current details of the car. For example, the engine’s cubic capacity, transmission, manufacturing year, and many other details. They inspect the car during claims to understand the extent of the damage. If the insurance company finds major modifications/differences in the insured car, then they can reject the claim.
| Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions. |
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