The Impact Of Vehicle Modifications On Car Insurance Premiums
Cars come in various designs and aesthetics in the market, but nowadays there is an increasing trend to modify cars to enhance their aesthetic look or features that would not have been present earlier in. However, while car modifications can give your car all those things that you would have desired, modifying your car may adversely affect your insurance plan and will probably end up being a greater burden on your pocket.
Do car modifications affect premiums? Yes, but it doesn’t necessarily mean parts or features added by you on your capacity but can also include add-ons and enhancements provided by the dealers selling you the car. Thus, individuals need to have comprehensive information on this aspect as sometimes even tiny adjustments could end up costing you more in your insurance plan.
Cost Dynamics of Car Modification
The car modification market has progressed rapidly and recorded evermore growth every year with more and more people wanting to modify their cars. For instance, globally the size of the car modification market stood at roughly around 55 Billion USD and the total revenue is expected to increase at about 3.45% from 2022 to 2022.
Despite such huge numbers modifying a car indeed is costly and may increase cost associated with modified cars more than the actual car parts that were natively used in the car. For instance, a typical installation of components which can include exhausts, air vents, turbochargers, or fuel systems can cost an individual around 2,500 USD.
Furthermore changes in suspension system which can include alterations in Coilovers, Sway Bars, and Lowering Springs can cost an individual around 4000 USD. Lastly, interior upgrades also do not cost less as even a meager steering wheel or Audio System Upgrade can cost an individual around 1000 USD.
Looking at these numbers it is fair to say that vehicle modifications on car Insurance premiums have an adverse effect and can also end up costing your car more than it is. This is one of the major reasons why insurance companies charge higher premiums on modified cars since the cost of replacing those modified parts will be even more than the regular parts.
Factors Influencing Modified Car Insurance Premiums
Modification when comes to mind surely brings to mind flashy pictures of double exhausts, heat vents, changing shockers, and custom tires. While it is partly that modification does involve changing these types of specifications in your car it is not limited to these things but contains a wide array of changes to vehicle modifications on car Insurance premiums.
For instance, some people like to change the performance of their engine, which also can be considered as a modification and will surely come with added costs in your insurance policy. This is because changing the performance of your engine alters the default tuning of the engine which can in turn lead to less efficiency and safety risks while driving as well.
Another thing that can increase car premiums for your car insurance bills is modified brakes because once modified the brakes can lead to less stability of the vehicle. This means the brakes people usually add into their existing vehicle are not optimally designed for that type of vehicle which can lead to safety hazards and braking accidents.
Furthermore, installing a separate or a new exhaust system will also affect your premiums as this will also make your vehicle less efficient and will in turn lead to unnecessary complications for your vehicle’s engine.
However, another thing that comes to mind is changing the car's paint. Changing the paint of the car partly and keeping the whole design of the car intact doesn’t necessarily have to be vehicle modifications on car Insurance premiums adversely affecting. In any way, however, if a person is redesigning the car wholly such that the integrity of its design gets distorted will surely attract a higher premium rate.
Notwithstanding all the things said above there are still some types of vehicle modifications on car Insurance premiums that individuals can adopt to their cars without facing the brunt of increased premiums. For instance, a person who installs an Anti Theft System on his/her car which has been approved by a standard governing authority becomes eligible for a discount on his/her premiums.
Furthermore, pasting stickers on the car is also not prohibited and will not attract any extra premium rate. Also, work done in the interior of the car which can range from installation of an Air Conditioner, Stereo or Modified Seats does not affect the insurance rates, since these things while changing the original make and composition of the car provide comfort to the drivers which is sometimes deemed necessary by the design of the car.
Impact of Vehicle Modifications on Insurance Rates
Previously we have discussed in detail how the modifications can adversely affect anyone’s car insurance premiums, however, there remains confusion in the minds of individuals about exactly how such an increase or decrease is calculated and what the estimated change one can expect from going through such an endeavor.
While there is no thumb rule or norm through which companies decide insurance rates on modifications however there is a settled consensus among such agencies on how to approach different kinds of vehicle modifications on car Insurance premiums differently.
For instance, if your modification costs more than 50,000 Rs which can include exterior and interior as well, there is generally around a 10 percent increase in the insurance rates, which also can fluctuate depending on different insurers. Furthermore, there are specific modifications like engine upgrades and full body upgrades which can in turn increase your premiums sharply at the rate of at least 20 to 25 percent.
Other than that exterior body enhancement like the attractive paint job, alloy wheels, or anything that enhances the look of your car can fetch you at least a 15-20% increase in your premiums as the enhancements increase the attractiveness of the car which can in turn make your car more susceptible to theft.
Tips to Manage and Minimize Premium Increases for Modified Vehicles.
It is usually not recommended to install unnecessary additions to your car which can not only increase your insurance premium but can also lead to road accidents if you are not careful. Having said that it is also important that some modifications can be more beneficial in the long run, which brings us to another topic of managing your modifications and also minimizing costs on your premium.
Comparing different insurers and choosing the best car insurance policy should be your first step, you should also choose vehicle modifications on car Insurance premiums carefully and go for modifications that do not affect your premiums greatly. It is generally better to also go for modifications that can reduce your premiums like theft systems etc which can help you compensate the premium gained on other modifications.
Conclusion
Individuals need to know how their car vehicle modifications on car Insurance premiums can adversely affect their car insurance premiums. It is advised that while going for purchasing modification parts consider going for OEM parts which not only cost less but also do not reduce your premiums greatly. This way you can enjoy your modifications without having to pay for it in your premiums and get the insurance from the best car insurance company in India with the best plan and the best coverage.
