Customers who are dissatisfied with some aspects of their newly purchased vehicles may be thinking of adding some customized features. While it's common to repaint a new vehicle, raise its suspension or enhance its engine, drivers should be aware that these modifications affect car insurance rates and coverage.
Auto Insurance rates are affected by any change to a vehicle regardless of how small it is. Changes to the vehicle's features could lower or increase its value, subsequently affecting insurance premiums. Thus, drivers need to report all customizations to their insurance providers. Failing to do so could result in the rejection of future claims against losses related to the vehicle.
There are several factors insurance companies consider when it comes to vehicle customization that determine how premiums will be affected. A vehicle modification always increases the vehicle's value. After all, if the owner sold the vehicle after customizing it, he or she would attract higher prices than if it were sold prior to modifying it. Similarly, the increased values is reflected in insurance premiums, which always go up after a modification.
Vehicle modifications can also create extra risks for drivers, which will also result in higher premiums. Enhanced engines and suspensions, for example, improve a vehicle's ability to handle high speeds. This can make it more likely the driver will be involved in an accident. Thus, the more a driver enhances the vehicle’s engine, the higher the insurance premiums will be.
Vehicle customizations can also add to the visual appeal of a vehicle. While a vehicle owner may be proud to drive an attractive vehicle, the insurance company may classify it as a higher risk vehicle. Good looking vehicles attract car thieves more easily. Most insurance companies compensate for this risk by raising premiums even if the driver adds alarm systems or other security features to the vehicle.
Security features and other features that reduce risk may seem like they should lead to lower premiums, but the opposite is sometimes true. Some insurance companies consider all modifications enhancements to the car's value, including safety enhancements such as enhancing the brakes. For this reason, drivers should consult their insurance companies before customizing the vehicle in any manner as well as after having the vehicle modified.