Making non manufacturer approved modifications could improve car insurance premiums by up to $9,600. This is according to research by the UK based uSwitch.com.

These pricing implications are putting off many motorists from making modifications to their vehicles, despite the fact that they can improve both the performance and appearance.

We therefore take a look at what counts as a modification, the impact of them on car insurance prices and the things that can be done to overcome them.

What counts as a modification and what effect will it have?

A car modification is defined as any change which is made to a car which results in it deviating from its original manufacturer specifications. These can range from even minor modifications such as replacing the cassette player with a CD player, to major alteration like the addition of full sports body kits. Motorist should ensure that they inform their insurance company when any change is made to their vehicle, as otherwise it could be used as a loop-hole by the insurer to avoid paying out when a claim is made.

The impact of the alteration on car insurance prices will depend upon the modification which has been made; with the whole basis of car insurance quote calculation based upon the statistical likelihood of the policy holder making a claim. For instance, simple side-skirts will only increase car insurance prices by about $140 with this price increases not only reflecting that this part will have to be replaced if an accident occurs, but also calculated on the premise that people who add a side-skirt to their car will be statistically more likely to make a claim.

However, drivers who completely change their exhaust system to ensure higher performance could see their premiums increase by up to $9,600. The higher performance will make the car more difficult to handle, hence making it more likely that the driver will be involved in an accident and make a claim. It should also not be forgotten than young male motorists who fit enhanced exhaust systems could fall into the ‘boy-racer’ category, which potentially explains these disproportionately prices.

Overcoming insurance discrimination

Discriminating against motorists by branding anyone who makes even a minor modification to their vehicle a dangerous driver is viewed by many to be a highly unfair system. While it is fair enough to charge more for motorists who replace a cassette player with a CD player to reflect the they will be far more likely to have their vehicle broken into than if the car had been left in its original specification; it is unfair to assume that everyone who adds performance enhancing features is a ‘boy-racer’. It is just as likely that they will be a car enthusiast who will take much better care of their vehicle than a conventional motorist. Additionally, why is it fair that modified vehicle owners will be discriminated against far more heavily than owners of high performance sports car?

However, it is not the end of the world, and there are still a number of things that can be done to bring down the price of premiums:

• Add a named driver- Adding a older person with more driving experience as a named driver on a car insurance policy is a sure fire way of obtaining cheaper premiums. It would also be an advantage if they were female, with women drivers being offered cheaper prices on account of them being statistically less likely to crash and make a claim than their male counterparts. Insurers will assume that the main policy holder will be sharing driving duties with the named drivers, and the quote will therefore take both motorists into account.
• Reduce mileage- Setting a smaller mileage allocation (number of miles you will be travelling over the duration of the policy) will always result in cheaper prices. This is due to motorists with smaller mileage limits being less likely to make a claim on account of them spending less time on the road. It is better to set a limit that is too small than to big, because you can always contact the insurer and offer to pay a little bit more in order to increase your mileage allocation at a later date.
• Security modifications- Not all modifications will bring insurance price increases, with security enhancements actually bringing down premiums. This is obviously due to it being made less likely that the policy holder’s vehicle will be stolen.
• Park securely- Parking a vehicle in a safe location like a secure company car park during the day and a locked garage at night will make it statistically less likely that the vehicle will be stolen or vandalised. This will be recognised by the insurance company who will offer cheaper motoring premiums.

Compare prices online- Compare prices with as many different insurers as possible in order to ensure that you are getting the best deal which is available to you in your given situation. Don’t forget that some insurers will be more lenient when it comes to modifications than others.

This entry was posted on Wednesday, October 5th, 2011 at 10:49 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.