Updated: April 15, 2025
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Generally, a modification is any customization or changes from the car’s original factory specifications.
The best insurance for modified cars is a policy with custom parts coverage, which covers the cost to repair or replace permanently installed custom parts.
Modifications to a vehicle may increase car insurance premiums. However, insurance providers have different definitions of what is considered a modification.
Modified cars usually need more than standard auto insurance. Most policies only cover factory parts, so you may need custom parts and equipment (CPE) coverage to protect your upgrades. A replacement cost policy can also help by covering the full value of modified parts without depreciation.
Modified cars are vehicles with changes from the original factory specifications. Modifications are often done to improve the vehicle’s functionality and performance. In some cases, they’re simply for aesthetic purposes. Examples of car modifications include changing your rims, bumpers, running boards or even adding a powerful sound system.
Modifications may change your auto insurance needs and may increase your rates. However, this is not always the case. Insurance providers have different definitions of modification. It’s best to talk to your provider about any vehicle modifications you’ve done.
While modifications are often done to improve the car’s functionality or performance, they aren’t always for the better. In some cases, modifications may lower the actual cash value of a car.
Typically, modifying a car increases insurance costs. That’s because of the added value to the vehicle. Other factors may also be considered. For example, modified cars may be more likely to get stolen. If the customization is a more powerful engine, the car may also be prone to speeding.
That said, certain modifications may lower the value of a car. It’s always best to talk to your insurer and discuss the changes to your vehicle.
A modified car has customizations that aren’t part of the original factory specifications. Modifications may refer to any added or aftermarket parts, including custom paint jobs or changes to the car engine.
Not all changes add value to a car. But generally, modifications can increase insurance premiums.
Modified car insurance companies may also have different definitions of modifications. But there are changes to cars that are commonly considered modifications, including:
Talk to your insurer to determine whether the changes you’ve made to your car are considered modifications. If you bought a car that’s already been modified, inform your insurer. Insurance companies don’t automatically assume there are modifications.
Standard car insurance doesn’t usually cover modified car parts. Car owners have to purchase custom parts coverage. In most cases, this is offered as an add-on.
Not getting modified car insurance can lead to out-of-pocket costs. Additionally, failure to announce modifications to your insurance provider can cause your policy to be void.
You may want to consider an agreed value policy if you have a modified car. This policy allows the insurance provider to settle the car's worth and any modifications.
Your insurance company and an appraiser will decide on the value of your car. The value includes the cost of a total loss of your modification. Instead of just the car’s actual cash value (ACV), your policy will cover the agreed-upon settlement account in the event of an accident.
The best way to ensure proper coverage is to inform your insurance provider about any modifications to your car. You should also let your insurer know if you bought a car with existing modifications. Withholding this information could invalidate your policy.
For example, if you get into a car accident and the other driver decides to file a claim with your provider, and your insurer finds out you have an undocumented modification, your policy may be invalidated. That means you’d have to pay out-of-pocket.
The best insurance for modified cars is one with custom parts coverage. Find out if the company offers this add-on coverage when looking for auto insurance. It covers damages done to permanently-installed custom parts.
Before purchasing a policy, make sure you understand all terms and features included. It would also help to compare quotes from different modified car insurance companies to find the one that offers the best deal based on your needs and circumstances.
Company | Description |
|---|---|
The company offers custom parts coverage as an add-on. This covers damages to equipment, not in the vehicle manufacturer’s standard. | |
Policyholders may opt to have custom parts coverage in their car insurance for $102 per year. This covers losses to custom equipment due to a comprehensive type of accident. | |
Elephant policyholders automatically get up to $1,000 in custom parts and equipment coverage (CPE). For higher coverage, a CPE add-on can be purchased as part of a comprehensive and collision policy. | |
CPE coverage offers protection for aftermarket updates to the policyholder’s car. This add-on coverage protects against damages to modifications not installed by the manufacturer. | |
The custom parts coverage is an add-on that policyholders can get as part of their comprehensive and collision auto insurance. It pays for the repair or replacement of aftermarket equipment. | |
Policyholders can purchase CPE as an add-on to get coverage for the repair or replacement of an item added to their car, or those considered after-market accessories. | |
Typically, policyholders only get coverage for the original equipment included by the manufacturer. To protect modifications, they can opt to add on custom parts coverage. |
Use MoneyGeek’s quotation tool to get an idea of the cost of your insurance premium if you add custom parts coverage.
Modified car insurance protects custom upgrades that standard policies may not cover. In this guide, we explored coverage options, costs and top insurers. If you’ve customized your vehicle, compare quotes to ensure your modifications are fully protected.
Your insurance coverage needs and policy costs may be affected if your car has modifications. MoneyGeek answers frequently asked questions to help you better understand auto insurance for modified cars.
Insurance providers may have different definitions of what a modified car is. But generally, it’s a vehicle with customized parts or changes that aren’t part of the original factory specifications.
The best modified car insurance companies are those offering custom parts coverage, which is often an add-on that covers the repair or replacement of modifications.
Modifying your car usually increases your insurance premiums because of the added value. However, some modifications may lower your car’s actual cash value.
Car modifications can increase the value of your car. Modified parts also tend to be more expensive to repair or replace. Due to the changes in your coverage needs, a modified car may be more expensive to insure. That said, there may be modifications that don’t lead to higher insurance premiums. The best way to check is to talk with your insurer.
Study Overview
MoneyGeek gathered and evaluated rates using a sample driver profile to determine the average cost of auto insurance policies for specific age groups, which factors affect the decline and how premiums vary for each insurance provider.
Data Sources and Depth
Our sources for data were the insurance departments of each state and Quadrant Information Services. We reviewed 22,848 quotes from six providers across 100 ZIP codes.
Driver Profile
We utilized an average driver profile based on the following information to determine average annual auto insurance costs:
To calculate the average cost for drivers in the United States with various coverage requirements, this profile was changed by region, coverage type and amount.
Coverage Levels and Deductibles Explained
The amount of money you must pay before the insurance begins to pay is known as a deductible. The best financial coverage is offered by comprehensive and collision coverage, which is usually referred to as "full coverage" insurance.
The abbreviation 100/300/100 means:
For our sample driver, we used 100/300/100 comprehensive and collision coverage with a $1,000 deductible when compiling national averages.
50/100/50 is an abbreviation for:
When gathering state-specific data, we used 50/100/50 comprehensive and collision coverage with a $1,000 deductible for our reference driver.
Learn more about MoneyGeek's methodology.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
