Modified car insurance

How do some normal car insurers cover modifications?

Company	What does it cover?
Budget Direct Car Insurance	Budget Direct will cover you for modifications you've told it about that it has approved in writing. If you have any further modifications planned then these should also be communicated.	Get quote
Bingle Car Insurance	Bingle will cover modifications and accessories that are permanently fitted to your car as long as they don't appear on Bingle's list of exceptions.	Get quote
Real Car Insurance	Real states it will cover "accessories or modifications made to your car that you have told the insurer about and that they've agreed to cover", but unfortunately doesn't mention any more specifics than that.	Get quote
Youi Car Insurance	Youi may provide cover to legally modified cars provided you tell it about the mods and it has agreed on specific amounts that are applicable. Examples of legal modifications include: Raised or lowered suspension Engine replacement, tuning or turbo Exhaust Disability modifications such as lifts and ramps	Get quote
Virgin Car Insurance	Virgin says you must tell it before you make any modification to the car, but doesn't highlight which mods it does or doesn't cover.
Coles Car Insurance	Coles will cover you for modifications you've told it about that it has approved in writing. If you have any further modifications planned then these should also be communicated.	Get quote
AAMI Car Insurance	AAMI car policies automatically include cover for modifications and accessories up to the amount your vehicle's covered for, you just need to let AAMI know what accessories or modification you've added to your car. You'll also need to make sure your car is valued correctly and includes those modifications.	More info
NRMA Car Insurance	NRMA states it will cover "any modifications, options or accessories that are attached to your vehicle".	More info
Everyday Car Insurance	Everyday Insurance doesn't state which modifications are covered, it just says you must notify it if your car has been modified.	More info

This information is correct as of August 2024.

What car modifications are covered by insurance?

It varies depending on provider, but modifications covered by most insurers include:

Modifications typically not covered by mainstream insurers include:

• Custom paint work
• Roll bars or roll cages
• Racing harnesses
• Nitro or hydrogen fuel-equipped engines
• Turbo or supercharged engines

Notifying your insurer about a car modification

Our expert says

"Most insurers will cover accessories and basic modifications without needing to be notified. There are certain things that some insurers will want to know about or even won't cover, though. If you're fitting something like a turbocharger on the car, a roll cage or getting it dipped in custom paint, it could be a good idea to get on the phone to your insurer first."

Alex Jeffs

Publisher

What type of insurance do I need?

CTP greenslip insurance is the only mandatory car insurance but if you'd like further protection then it's worth considering comprehensive, third party fire and theft or third party property damage car insurance.

With certain modifications, such as those listed above, you may not be covered by a standard policy from a mainstream insurer. Instead, you'll need to take out one of the following with a specialist insurer, designed for modified vehicles:

• Regular use. Personal or business purposes.
• Recreational use. For cars not used for regular everyday driving, but still driven occasionally for recreation.
• Limited recreational use. For vehicles driven fewer than 60 days or 5,000 kilometres a year.
• Club/concessional use. Cover for modified cars that are registered under a club or concessional scheme.
• Restoration/laid-up. For unregistered vehicles being restored, provided they are stored securely in a garage.

What do specialist insurers cover?

The following is a list of insurance companies who offer modified car insurance for exotic or historical vehicles in Australia:

Insurer	Modifications covered
Dawes car insurance	All legal modifications (but will not reimburse any modifications required by law) Only offered through a broker
Enthusiast car insurance	All legal modifications Max of $2,500 for audio or visual systems Specialist cover for classic, vintage and prestige vehicles
Ryno car insurance	All legal modifications (but will not reimburse any modifications required by law) Specialist insurance for classic, prestige and vintage vehicles
Lumley car insurance	All legal modifications Max of $1,500 for audio or visual systems Specialist cover for vintage, veteran and classic vehicles (including motorcycles)
RAA car insurance	All legal modifications Offers hard to place insurance for modified and imported vehicles

This information is correct as of August 2024.

When can specialist car insurance help?

Specialist car insurers appreciate that people take great care in investing time and money into their vehicles and are therefore more willing to insure vehicles with performance-enhancing modifications. Certain modifications, such as to the engine, chassis or suspension, may prevent you from securing cover from a mainstream insurer or make the premiums unreasonable.

Unique car insurance

Specialist insurers usually cover unique modifications by adding substantially to the excess you pay. They also tend to charge more for more powerful vehicles. Boosting your car's power by 20% will probably boost your premiums by at least 20% as well. You won't necessarily be able to mitigate the cost increases by installing modifications for safety, because the added value of the modifications still contribute to the overall cost of the vehicle.

Specialised insurance for modified classic cars

Specialists are particularly good at taking care of modified classic cars. They are better able to negotiate a more accurate agreed value for the car rather than simply resorting to market value, while understanding the needs of the owner.

For example, they may offer flexible lay-up periods for classic cars which don't see much use. They are also likely to offer you the choice of your own mechanic and the option to retain valuable or rare parts salvaged from your car in the event of an accident. Mainstream insurers can rarely offer such flexibility for modified classic cars.

Should I use modified car agreed value or market value?

When looking for modified car insurance you'll have to decide with market or agreed value cover. In most cases, it will probably be best to go for an agreed value policy, as outlined below:

• Market value. This policy pays you the car's current market value, subject to depreciation, at the time of the claim. Thus, the car's replacement value fluctuates constantly, meaning a modified car covered by this policy will almost always be underinsured. Market value is rarely used for modified or classic cars.
• Agreed value. Agreed value is how much you and your insurer agree the car is worth. This number is locked in at the time of purchase and can only be changed at certain times. This is especially useful for heavily modified or classic cars, but generally costs more. Agreed value is almost always used for modified or classic cars.

Is it possible to get low-cost cover for modified cars?

This depends. How cool is your car? Like any policy, there are plenty of ways to reduce your premiums when buying modified car insurance. These include:

Insurance rules for modified cars

• Is your modification legal? Naturally, all modifications made to your car must be street-legal, otherwise no insurer is even going to look at you. Also, if you are stopped by the police with illegal modifications, you could face a fine or worse.
• Was your modification approved? In Australia, modifications must be approved by the motor vehicle licensing department in the state or territory you reside in. They must comply with Australian Design Rules, traffic rules and regulations and also with the National Code of Practice for Light Vehicle Construction and Modification (NCOP).
• Do I need to tell my insurer if I make modifications to my car? Yes. If you don't tell your insurer, it can reject your claims and cancel your policy. If your vehicle is under warranty and you don't tell the insurer, you may void the warranty entirely. And if you don't tell the licensing authorities and your modification turns out to be illegal, you could receive a defect notice and a substantial fine and have your vehicle de-licensed or impounded.

Modifications which are typically permitted include:

Modifications which are typically not permitted include:

How can modifications affect the cost of insurance?

There are 2 main reasons that a car modification will boost your premiums:

• It increases the risk of an accident. For example, getting a custom paint job might drive up the risk of an accident if it's shinier and reflects more light into other drivers' eyes.
• It increases the risk of your car being stolen. The same paint job could increase the risk of your vehicle getting stolen if it makes your car look fancier and thus more appealing to a thief.

Exactly how much a particular modification will affect your premiums really depends on the specifics of the modification. The only general rule is that an insurance company will be much more willing to give you a good deal if the modification has been installed by a licensed professional, rather than by you.

• What is a modified vehicle?

  The NSW Government defines a modified vehicle as one that's been modified from its original manufacturer's specification. This could be by replacing, adding or upgrading components of its body or enginge, or things that alter its appearance, handling or performance.

• What is the best insurance for a modified car?

  What's best for you will depend on what kind of modifcations your car has, what your budget is and the level of cover you need. If you've got pretty standard modifcations then a normal insurer might fit your needs. If you've got more enhanced modifications then you may be better suited to looking at specialist car insurers.

To make sure you get accurate and helpful information, this guide has been edited by Jason Loewenthal as part of our fact-checking process.

Written by

Gary Ross Hunter

Journalist

Gary Ross Hunter has over 6 years of expertise writing about insurance, including life, health, home, and car insurance. Having reviewed hundreds of product disclosure statements and published over 800 articles, he loves simplifying complex insurance topics for everyday readers. Gary has contributed to major outlets like Yahoo Finance, The Sydney Morning Herald, and news.com.au, and holds a Bachelor of Arts (Honours) in English Literature from the University of Glasgow, along with a Tier 2 General Advice certification, ensuring his work adheres to ASIC’s RG146 standards. See full bio

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Co-written by

Richard Laycock

Editor

Richard Laycock is Finder’s insights editor after spending the last five years writing and editing articles about insurance. His musings can be found across the web including on MoneyMag, Yahoo Finance and Travel Weekly. Richard studied Media at Macquarie University and The Missouri School of Journalism and has a Tier 1 Certification in General Advice for Life Insurance. See full bio