How Car Modifications Affect Your Insurance Premium

As an FCA-authorised expert broker helping UK drivers find the right motor insurance, WeCovr knows that customising your car is about more than just aesthetics. But failing to declare modifications can invalidate your policy. This guide explains everything you need to know.

WeCovr details how even small modifications can increase costs — and how to declare them properly

For many UK drivers, a car is a reflection of their personality. From fitting new alloy wheels to remapping the engine for a little extra power, modifying a vehicle is a popular way to make it unique. However, these changes, no matter how small, can have a significant impact on your motor insurance premium.

Insurers calculate premiums based on risk. Any deviation from the manufacturer's factory specification changes that risk profile. Failing to inform your provider about modifications can lead to rejected claims and even a voided policy, leaving you uninsured and personally liable for costs. Understanding what constitutes a modification and how to declare it is not just good practice—it's essential for staying legal and protected on the road.

Understanding Your Legal Motor Insurance Obligations in the UK

Before diving into modifications, it's crucial to understand the legal framework of motor insurance in the United Kingdom. Under the Road Traffic Act 1988, it is a criminal offence to use, or permit others to use, a motor vehicle on a road or in a public place without at least third-party insurance.

The police can check your vehicle's insurance status instantly using the Motor Insurance Database (MID). Penalties for driving without valid insurance are severe, including:

• A fixed penalty of £300 and 6 penalty points on your licence.
• If the case goes to court, you could receive an unlimited fine and be disqualified from driving.
• The police also have the power to seize, and in some cases, destroy the uninsured vehicle.

It is your responsibility to ensure your policy is valid at all times, which includes keeping your insurer updated about any changes to your vehicle.

The Three Levels of Car Insurance Cover

When you buy motor insurance, you'll typically choose from three main levels of cover.

1. Third-Party Only (TPO): This is the minimum legal requirement. It covers injury or damage you cause to other people, their vehicles, or their property. It does not cover any damage to your own vehicle or injuries to yourself.
2. Third-Party, Fire and Theft (TPFT): This includes everything in a TPO policy, but adds cover for your vehicle if it is stolen or damaged by fire.
3. Comprehensive: This is the highest level of cover. It includes everything from TPFT, but also covers damage to your own car in an accident, even if you were at fault. It often includes other benefits like windscreen cover as standard.

Business and Fleet Insurance: For businesses, the obligations are similar but extend to cover employees driving for work purposes. Fleet insurance policies are designed to cover multiple vehicles under a single policy, and it's vital that any modifications to company cars or vans—such as signwriting, internal racking, or tow bars—are declared to the insurer.

Key Insurance Terms Every Driver Should Know

Navigating a motor policy can feel complex. Here are the core concepts you need to grasp:

• No-Claims Bonus (NCB) or No-Claims Discount (NCD): This is a discount you earn for each consecutive year you hold a policy without making a claim. It can significantly reduce your premium, often by up to 70% or more after five or more claim-free years. Making a claim typically reduces your NCB by two years, unless you have protected it.
• Excess: This is the amount of money you agree to pay towards a claim. There are two types:
  • Compulsory Excess: Set by the insurer and non-negotiable. It's often higher for young or inexperienced drivers.
  • Voluntary Excess: An amount you choose to pay on top of the compulsory excess. A higher voluntary excess can lower your premium, but you must be able to afford the total excess if you need to claim.
• Optional Extras: These are add-ons you can buy to enhance your policy, such as:
  • Breakdown Cover: Roadside assistance if your car breaks down.
  • Motor Legal Protection: Covers legal costs if you need to pursue a claim for uninsured losses (like your excess or loss of earnings) against a third party.
  • Courtesy Car: Provides a replacement vehicle while yours is being repaired after an insured incident.

What Does an Insurer Class as a Car Modification?

In the eyes of an insurer, a modification is any change made to the car that alters it from the manufacturer's standard factory specification. This definition is deliberately broad. It includes obvious performance enhancements as well as minor cosmetic tweaks.

Many drivers are surprised to learn that even changes intended to improve safety or security are still classed as modifications and must be declared. Here’s a breakdown of common categories.

Performance Modifications

These are changes designed to enhance a car's speed, power, handling, or sound. They almost always increase premiums because they heighten the risk of an accident and can attract thieves.

• Engine Remapping (Chipping): Altering the Engine Control Unit (ECU) to increase horsepower and torque.
• Exhaust System Changes: Fitting a sports exhaust or a decat pipe.
• Air Filter Upgrades: Installing a performance or cold air intake.
• Suspension Changes: Lowering or stiffening the suspension with coilovers or new springs.
• Brake Upgrades: Fitting larger discs or high-performance callipers.
• Turbocharger or Supercharger additions.

Cosmetic Modifications

These alterations change the vehicle's appearance. While some may seem harmless, they can increase the risk of theft or vandalism and make repairs more expensive.

• Alloy Wheels: Swapping standard wheels for larger or more stylish aftermarket ones.
• Body Kits: Adding spoilers, side skirts, or custom bumpers.
• Custom Paint Jobs or Vinyl Wraps: Changing the car's colour or finish.
• Tinted Windows: Applying film to the glass (note: there are legal limits for front windows and the windscreen).
• Light Upgrades: Installing non-standard headlights or taillights, such as LED or Xenon conversions.
• Stickers and Decals: Yes, even stickers can be considered a modification by some insurers, especially if they are large or controversial.

In-Car Entertainment (ICE) and Security Modifications

Upgrading your sound system or security features also needs to be declared.

• Stereo and Speaker Upgrades: Replacing the head unit or installing powerful subwoofers.
• Satellite Navigation Systems: If it's a professionally fitted, non-standard unit.
• Alarms and Immobilisers: Fitting a non-standard or upgraded security system. A Thatcham-approved device can sometimes lead to a discount, but it must still be declared.
• Tracking Devices: Installing a GPS tracker to aid recovery if the vehicle is stolen.

Functional and Accessibility Modifications

These are changes made for practical purposes. While they don't usually signal a higher-risk driver, they still alter the vehicle from its standard spec.

• Tow Bars: Fitted for towing a caravan or trailer.
• Roof Racks: Adding bars or a box for extra storage.
• Hand Controls and Lifts: Modifications made to improve accessibility for disabled drivers. These are often viewed neutrally or favourably but must be declared to ensure they are covered.

Why Do Modifications Increase Motor Insurance Premiums?

Insurers are in the business of calculating and pricing risk. From their perspective, a modified car presents several additional risks compared to a standard model.

1. Increased Theft Risk: A car with expensive alloy wheels, a powerful sound system, or a sporty body kit is more attractive to thieves. According to the Office for National Statistics (ONS), vehicle theft has been on an upward trend, and modified cars are often prime targets.
2. Higher Accident Risk: Performance modifications can significantly alter a car's handling and power output. Insurers may correlate these changes with a greater likelihood of being involved in a high-speed accident. The driver profile is also a factor; insurers may perceive that drivers who invest in performance upgrades are more prone to risk-taking behaviour.
3. Increased Repair Costs: Custom or rare parts are more expensive to source and replace than standard, factory-fitted components. A custom paint job or a vinyl wrap requires specialist work to repair after a scrape. This drives up the potential cost of any claim. The Association of British Insurers (ABI) regularly reports on rising vehicle repair costs, a trend exacerbated by non-standard parts.
4. Statistical Profiling: Insurers build profiles based on vast amounts of data. Statistically, certain modifications are linked to a higher claims frequency. Even if you are a safe driver, your premium will be influenced by the claims history of other drivers with similar modifications.

The table below illustrates how different types of modifications can affect your premium.

How to Declare Car Modifications Correctly: A Step-by-Step Guide

Honesty and transparency are paramount. Under the Consumer Insurance (Disclosure and Representations) Act 2012, you have a duty to take "reasonable care not to make a misrepresentation" to your insurer. Failing to do so can have disastrous consequences.

Follow these steps to ensure you are fully covered:

1. Inform Your Insurer Before You Modify: The best time to talk to your insurer is before you spend any money. Get a quote for the planned modification to see how it will affect your premium. In some cases, your current insurer may not be able to cover the modification at all, meaning you will need to find a specialist provider.
2. Be Specific and Accurate: Don't just say "new wheels." Provide the make, model, and size. If you've remapped the engine, state the new BHP and torque figures. The more detail you provide, the more accurate your cover will be. Keep all receipts and documentation from the garage that carried out the work.
3. Declare Everything, No Matter How Small: From stickers to a new gear knob, if it's not factory standard, declare it. It's better to over-disclose than to be underinsured. The insurer will decide what is relevant to the premium.
4. Update Your Policy at Renewal: When you receive your renewal invitation, don't just let it roll over. Carefully review the policy documents and ensure all modifications are listed correctly. If you've made new changes during the year, you must add them.
5. What if You Buy a Modified Car? It is your responsibility to check the car against its factory specification and declare any existing modifications to your insurer when you take out a policy. Ask the previous owner for a full list of changes and any supporting paperwork.

The Severe Consequences of Non-Disclosure

Some drivers are tempted to keep quiet about modifications to avoid a higher premium. This is a false economy and carries enormous risks.

• Policy Invalidation: If you make a claim and the insurer's engineer discovers undeclared modifications, your provider can declare your policy void. This means they treat it as if it never existed.
• Claim Rejection: They will refuse to pay for your repairs. While they are legally obligated under the Road Traffic Act to cover third-party costs, they are entitled to recover every penny of that payout directly from you. This could run into tens or even hundreds of thousands of pounds.
• Cancellation and Future Insurance: A cancelled or voided policy is a huge red flag on your insurance record. You will find it much harder and more expensive to get cover in the future, as you must declare the cancellation to all subsequent providers.
• Criminal Charges: If your policy is voided, you are technically driving without insurance. If caught, you face the penalties mentioned earlier, including points, fines, and a potential driving ban.

Real-World Example: A driver has a comprehensive policy and modifies their car with an engine remap and a loud exhaust, but doesn't tell their insurer. They are later involved in an accident that is their fault. Their insurer discovers the modifications during the damage assessment and voids the policy. The driver has to pay for their own £5,000 repairs and is then pursued by the insurer to repay the £15,000 paid out to the other driver for their injuries and vehicle damage. They also get 6 points on their licence for driving without insurance.

Finding the Best Car Insurance for a Modified Vehicle

Finding affordable cover for a modified car can be challenging, but it's not impossible. Mainstream insurers may decline to quote or charge a very high premium. This is where specialist insurers and expert brokers like WeCovr come in.

• Specialist Insurers: Some providers specialise in non-standard vehicles, including classic cars, high-performance cars, and modified cars. They have a better understanding of the parts and the risks involved and can often provide a more competitive quote.
• Use a Broker: An independent, FCA-authorised broker like WeCovr has access to a wide panel of both mainstream and specialist insurers. We can do the shopping around for you, ensuring we find a provider who will cover your specific modifications at a fair price. This saves you time and can lead to significant savings.
• Be Prepared to Provide Details: When seeking a quote, have a full, detailed list of every modification ready, including makes, models, and performance figures where applicable.

WeCovr has helped over 800,000 customers find the right policy for their unique needs, from standard hatchbacks to heavily modified sports cars and commercial fleets. We understand the market and can guide you to the right motor policy.

Modifications and Fleet Insurance: A Business Perspective

For fleet managers, ensuring all vehicles are correctly insured is a primary responsibility. Van modifications are extremely common and essential for business operations.

Common van modifications include:

• Internal Racking and Shelving: For organising tools and equipment.
• Signwriting and Vinyl Wraps: For company branding and advertising.
• Tow Bars: For trailers.
• Beacons and Specialist Lighting: For utility or emergency response vehicles.
• Refrigeration Units: For temperature-controlled transport.

Just like with private cars, all these modifications must be declared on the fleet insurance policy. Failure to do so could invalidate cover for a vehicle involved in an incident, exposing the business to huge financial and legal risks. An expert broker can help ensure your fleet policy schedule is accurate and provides the right level of cover for your specific operational needs.

Cost-Saving Tips for Insuring a Modified Car

While modifications often mean higher premiums, you can take steps to manage the cost:

1. Choose Modifications Wisely: Consider the insurance impact before you buy the parts. A Thatcham-approved alarm or tracker might offset the cost of cosmetic mods.
2. Build Your No-Claims Bonus: A long history of claim-free driving is one of the most effective ways to lower your premium.
3. Increase Your Voluntary Excess: If you can afford to pay more in the event of a claim, a higher voluntary excess will reduce your annual premium.
4. Pay Annually: Insurers charge interest for paying in monthly instalments. Paying in one lump sum is almost always cheaper.
5. Limit Your Mileage: If you can accurately predict a lower annual mileage, it will reduce your premium. But be honest—insurers can check MOT records.
6. Shop Around at Renewal: Never simply accept your renewal quote. Use a comparison service or a broker to compare the market. WeCovr can help you find competitive quotes from a range of insurers at no cost to you.
7. Consider Multi-Policy Discounts: Customers who buy motor or life insurance through WeCovr may be eligible for discounts on other insurance products, providing even greater value.

Frequently Asked Questions (FAQs)

Q1: Do I need to declare temporary modifications like winter tyres or a roof box? A: Most UK insurers, as members of the ABI, do not require you to declare winter tyres. However, it is always best practice to check your specific policy wording or contact your insurer to be certain. A roof box is also a temporary addition, but as it alters the car's height and aerodynamics, you should inform your insurer, especially if you plan to leave it on for an extended period. It's better to be transparent.

Q2: I bought a second-hand car and later discovered it had an undeclared engine remap. What should I do? A: You must contact your insurer immediately to declare the modification. The responsibility for ensuring the car's details are correct lies with you, the current policyholder. Your insurer will reassess your premium based on the new information. They may charge an additional premium, or in some cases, they may not be able to continue cover. If you do nothing and have an accident, your claim will almost certainly be rejected.

Q3: Are all modifications bad for my insurance? Will any lower my premium? A: Not all modifications increase your premium. Those that improve vehicle security or safety can sometimes lead to a discount or be viewed neutrally. For example, fitting a Thatcham-approved alarm, immobiliser, or GPS tracking device can reduce the theft risk and may lower your premium. Similarly, installing parking sensors could result in a small discount as it reduces the risk of low-speed scrapes. You must still declare these changes.

Q4: Does fitting a dash cam count as a modification, and will it reduce my insurance? A: A dash cam that is plugged into a 12V socket is not usually considered a modification. However, if it is professionally hard-wired into the car's electrical system, it should be declared. While a dash cam itself may not directly result in an upfront discount from all insurers, it provides invaluable evidence in the event of a claim, helping to prove you were not at fault. This can protect your No-Claims Bonus and prevent your premium from rising unfairly after a non-fault incident.

Ready to find the right cover for your car, van, or fleet? Whether standard or modified, WeCovr is here to help. As an FCA-authorised broker with high customer satisfaction ratings, we compare quotes from a wide panel of UK insurers to find you the best motor insurance provider for your needs, at no extra cost.

Get your free, no-obligation motor insurance quote from WeCovr today.