Over the years I’ve modified many cars that I’ve owned. Everything from small modifications that improve security or passenger comfort, to engine, suspension, and braking modifications. And there’s one thing I’ve learned with insurance companies. It’s how you explain the nature of modification in terms of how it affects performance and risk that affects the cost of your insurance.
One of the many jobs I’ve had in my career was working on the development of car insurance software and I got to see first hand how the process works behind the scenes. You essentially start off with a baseline insurance quote based on the stock version of your vehicle. Then you add the modifications, and the underwriter, the actual company that will insure the vehicle, reviews the modifications based on their understanding of the changes made, plus algorithms involving risk, the amount of time the car is likely to be driven on the road, etc. Then an additional amount is arrived at and added to the baseline cost to provide you with your individual quote.
So the key here is to ensure that you correctly inform your insurance company about all modifications that have been made to the vehicle, while trying to get the lowest quote you can. And there is an art in doing this.
Note: You must inform your insurance company of every and all modifications that have been made to the vehicle otherwise your insurance is null and void. It does not pay to lie! Many modifications are now standard, in that they are a selectable option, such as alloy wheels, wider wheel arches etc. Here I am talking about modifications which can be interpreted or stated in different ways.
As an example I once modified an Austin Mini by installing a ‘stage 1 kit’. There are at least two ways of informing the insurance company about this particular modification, those being that:
1 – I have increased the vehicle’s bhp by 20%
2 – I have increased the vehicle’s bhp by 8bhp
Both are factually correct. However as an experiment when repeating statement one to the potential insurer I was quoted a three-figure increase to my insurance, whereas with statement two they said it’s so low that they will note it on my policy but that it would not affect the premium in any way.
Notice the difference?