Modifications and declaring them to a car insurer.
It’s no secret that declaring modifications can increase car insurance quotes so when insurers ask if a vehicle has been modified from its manufactured state it can be tempting to answer “no”.
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However, this approach can backfire when it comes time to make a claim – so are there any modifications you can keep quiet about?
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The affect of car modifications on premiums.
To illustrate the affect that modifications can have on a motorist’s car insurance premiums we ran a series of quotes for a 27-year-old male driver from Leicestershire who owns a 1960 Austin A40 Farina. He chose a voluntary excess of £250 and has built up five years no-claims bonus. His vehicle is also fitted with an alarm and immobiliser and he drives less than 5,000 miles a year in the car.
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With no modifications, the cheapest car insurance available to this driver was just £106.28 a year through MCE Insurance, according to the comparison website.
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However, if the same driver then fitted non-standard alloy wheels to the vehicle his cheapest premium would rise to £119.00 a year – again through MCE Insurance. Perhaps most notably however, the number of insurers willing to offer a quote for this classic vehicle slumped from 33 insurers for the original quote, down to just five insurers for the quote with non-standard alloy wheels.
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By making exhaust system changes to the vehicle, the affect on the premiums available would be even more dramatic. Now the cheapest quote would be for £143.38 a year, with only four insurers willing to insure this customer from the providers listed.
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Isn’t this all the more reason to keep quiet about modifications?
Given the fact that even relatively small modifications appear to push premiums up you might be tempted to simply not inform your insurer when you make changes to your vehicle. However, this carries huge risks. All insurance companies ask if your vehicle has been modified because modified parts can be more expensive to repair/replace. In the event of an accident your insurer will usually want to see the extent of the damage to assess the cost of repair – and if they catch that your vehicle has been modified without notification they can throw out your insurance claim and invalidate your policy.
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So honesty is always the best policy – no matter what modifications you make, you must keep your insurer informed.
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The good news is that some modifications barely affect premiums at all, depending on the insurer you choose. For example, the Austin A40 driver’s original quote through Right Choice Insurance came in at £530 a year – and this didn’t change at all when he added alloy wheels. Similarly, his quote with Kwik-Fit Insurance with alloy wheels was for £483.97 a year – and this remained the same after exhaust system changes were made. So while it’s more than likely that your premiums will rise when you modify your car, the increase could be relatively small or even non-existent. So it’s not worth taking the risk of being dishonest.
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How to keep modified car insurance premiums affordable.
Your chances of gaining an affordable premium for modified car insurance will often increase if you approach a specialist insurer. Some companies state they offer better value to modified car drivers because they respect that they typically take better care of their vehicles. Indeed they may also offer additional incentives such as:
- Agreed valuations: So you know what your vehicle is worth from the outset in case it is written off or stolen.
- Hire cover: Protection for your vehicle if you plan to rent it out, such as for a wedding.
- Track/Rally cover: In case you plan to enter the vehicle into a special event.
- Special discounts: Some modified car insurers offer unique discounts such as money off for agreeing to a mileage cap; a discount for completing an advanced driving course; and a discount for joining a members’ or owner’s club.
While these incentives may be worth taking advantage of, don’t assume that the specialists are always the cheapest. Use a comparison website to compare car insurance quotes for your vehicle in addition to approaching the specialists for quotes to get a more complete overview of the market.
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Lower your risk to lower premiums.
Crucially you should remember that car insurers won’t judge your premiums based on modifications alone. They will also take into account your driving history, your address, your personal circumstances, the vehicle you drive and your annual mileage, among other factors. Lowering your risk in these areas can reduce your premiums – so here are some tips:
- Be secure: One type of modification that insurers do encourage are adding security features such as alarms, immobilisers and tracking devices.
- Drive safely: Building up a no-claims discount could help reduce premiums by as much as 60 per cent after four or more years.
- Increase your excess: Agreeing to a higher voluntary excess could lower your premiums but keep it at an affordable level.
- Park safely: Store your vehicle in a locked garage overnight if one is available. If not, then at least try and park on a driveway or in a well-lit area.
- Pay annually: You can avoid monthly interest charges by paying car insurance annually.
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