Car insurance for modified cars

Depending on your insurer, your car insurance may cover some or all legal modifications to your vehicle. Typically, you will need to declare any modifications to your insurer when you’re submitting your car insurance application, even for minor modifications such as installing a tow bar. Major modifications, however, are harder to find coverage for and may require specialised insurance.

If you decide to purchase a used car that’s undergone modifications, make sure you receive a written record of the changes from the previous owner.

Read the Product Disclosure Statement (PDS) before you choose your policy to understand the inclusions and exclusions of your cover. Read the Target Market Determination (TMD) to check your suitability for a policy.

Most car insurance policies will define modifications as any changes made to a vehicle that differs from the manufacturer’s standard and may affect the appearance, handling, performance or safety of the car. This can include anything from custom paint jobs to major accessibility changes. The modifications covered by your policy may vary between insurers so it’s a good idea to compare cover before choosing a policy.

Car owners with modified cars will likely have to pay a higher car insurance premium. This is mostly due to the fact a modified car will typically have a higher value than a non-modified car, and that any damages to the car may cost more to repair.

Young drivers under 25 with modified cars may be considered a higher risk of needing to claim, which can lead to higher premiums, or even being denied car insurance entirely. P-platers are prohibited from driving unapproved high-powered or performance vehicles in QLD¹, NSW², SA³ and VIC⁴.

The best modified car insurance policy will depend on your individual circumstances and the level of cover you’re after. A comprehensive car insurance policy can provide the most cover for your modified car, and may include cover for:

• Replacing or repairing your car after an accident, theft, fire or severe weather event
• Towing your car if it breaks down
• Your personal property if it’s damaged or stolen while in your car.

You may also be able to choose add-ons to your policy such as roadside assistance, hire car cover and more.

If your car has been legally modified for your disability, it’s possible to get cover depending on the total cost of modifications. Some insurers will only cover cars with modifications that cost less than a certain amount (e.g. $5,000). If you’re looking for cover, it may be better to call and ask about your modifications rather than compare online to be sure you’re getting the most suitable policy.

There are many ways to legally modify your car in Australia, although some types of modifications may require certification and (for significant modifications) even assessment or inspections to be approved. It’s also important to note that while some modifications may be legal, they may not be covered by your insurance. Keep in mind that approval and legality of modifications will vary between Australian states and territories. Always check the relevant government body before altering your vehicle.

Common legal modifications may include, but are not limited to:

• Bull bars or towbars
• Car audio systems
• Heating, ventilation and air-conditioning
• Sound systems
• Custom paintjobs
• Mudflaps or pebble guards
• Roof racks
• Spoilers
• Tinted windows
• Sunroofs
• Alloy wheels or wider tyres (that meet the legal specifications)
• Sports seats.

If you have illegally modified your car, your insurer may not only refuse to cover any claims, but also cancel your policy. It’s important to always get the appropriate permission when getting your vehicle modified. Some examples of illegal modifications include:

• Window tinting that doesn’t meet the transparency ratings of your state
• Under-body neon lights
• Lowering a vehicle too close to the ground (e.g. under 10cm)
• Any major upgrades to the engine, transmission or configuration of a car that hasn’t been approved by the appropriate regulatory bodies.