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How to insure a modified car in Canada?

By Arthur Dubois | Published on 22 Aug 2023

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    Whether you’ve added a fresh coat of paint, a brand new sound system, or turbocharged your engine, modifications to your car can make it a personalized piece of artwork. However, changes can also affect your vehicle’s car insurance. Here’s all the information you need to insure a modified vehicle in the Great White North.

    What does “car modification” mean for insurance companies?

    For car insurance companies, a car modification can be any alterations made to a vehicle that changes its original manufacturer’s specifications. These changes generally fit into three categories: cosmetic, safety, or performance. Modifications can include tinting your windows, changes in colour,  internal improvements, performance enhancements like adding a turbocharger or structural changes such as lowering the vehicle’s suspension.

    Some changes you make to your vehicle can affect your insurance premium. If they increase the car’s value or its performance, your premiums could increase. In most cases, additional safety features you install typically don’t raise your insurance rates unless they also increase the value or cost of replacing or repairing your vehicle.

    Some cosmetic modifications, such as special paintwork or alloy wheels, don’t enhance performance but can still affect insurance costs. Your insurer could raise your premiums because these changes may increase your car’s value or its desirability to thieves.

    Modifications that enhance your vehicle’s performance will usually result in higher premiums. Insurers increase their premiums for these enhancements because people may use their cars to speed or race, increasing the risk of an accident.

    Two things to remember are some modifications require a permit, and some changes are illegal. Before painting your car a different colour, for example, you may need to apply for a new vehicle permit. Your insurance policy won’t cover illegal modifications, and illegal changes to your vehicle can sometimes result in fines or a prison sentence.

    Modifying Your Vehicle

    Before modifying your vehicle, check with your insurer to determine if your car insurance policy covers the changes you want. If not, you’ll need a modified car insurance policy. 

    Researching the modifications you want to make is essential. Look into the costs of the changes and have a professional with a good reputation make the changes for you. A qualified inspector should review the work to make sure it’s done correctly. Once the modifications are complete, notify your insurer to update your policy to reflect the changes to your vehicle.

    Three Steps to Insure a Modified Car in Canada

    Insuring a modified vehicle in Canada is more complex than insuring a regular car. It’s imperative that those looking to modify their vehicles or those who have already done so understand how to get the right insurance coverage.

    1. Informing Your Insurance Company About Modifications

    Transparency is vital when it comes to insuring a modified vehicle. You should inform your car insurance company when you decide to modify your vehicle. Not doing so can lead to your claim being denied in case of an accident.

    When you inform your insurance company about the modifications, it allows them to assess the potential risks associated with the changes made to your car. They need to know if you’ve made any modifications that could impact your vehicle’s safety, value, or performance. By providing this information upfront, you ensure that your insurance policy accurately reflects the current state of your car.

    Additionally, informing your insurance company about modifications can help you avoid legal issues. In Canada, failing to disclose modifications to your insurer can be considered insurance fraud, resulting in severe consequences.

    2. Finding the Right Insurance Provider for Modified Cars

    Not all insurance providers insure modified cars. Those who do might charge a hefty premium. Therefore, shopping around and finding a provider that can accommodate your specific needs and budget is essential.

    When looking for an insurance provider for your modified car, consider contacting a car insurance broker, such as Surex, who will help you get multiple car insurance quotes.

    It’s also a good idea to seek recommendations from other car enthusiasts who have modified vehicles. They can provide valuable insights and suggest insurance providers with a track record of insuring modified cars at reasonable rates.

    Remember, finding the right insurance provider is not just about the cost. It’s also important to consider the level of coverage they offer, their reputation for customer service, and their willingness to work with you throughout the modification process.

    3. Understanding Your Insurance Policy

    Once you find a suitable insurance provider, make sure you thoroughly understand your policy. What aspects of your modifications are covered? What is your deductible? Are there specific conditions to maintain coverage? These are some questions you need to ask your insurer.

    Take the time to review your insurance policy in detail. Understand the terms and conditions that apply to your modified car coverage. This will help you avoid any surprises or misunderstandings in the event of a claim.

    In some cases, insurance policies for modified cars may have certain restrictions or conditions. For example, they may require you to provide documentation for the modifications, such as receipts or photos, to maintain coverage. It’s important to be aware of these requirements and comply with them to ensure your coverage remains valid.

    Insuring a Modified Car in Canada: The Bottom Line

    Insuring a modified car in Canada may seem daunting, but armed with the correct information, it becomes manageable. By comparing multiple car insurance quotes, you can find a tailored plan that meets your needs and celebrates your vehicle’s uniqueness. The key is being informed, transparent, and always looking for the best coverage options.

    FAQs About Insuring a Modified Car in Canada

    Do car mods increase insurance in Canada?

    In Canada, car modifications can lead to increased insurance premiums. Insurance companies assess risk based on various factors, and certain changes can alter the car’s performance and safety or make it more susceptible to theft. If these changes increase the risk of an accident, damage, or theft, insurers may raise the premiums to reflect the heightened risk.

    Do you have to tell insurance about car mods in Canada?

    Yes, in Canada, informing your insurance company about any modifications made to your vehicle is imperative. Failing to disclose this information can be considered a breach of your insurance policy. Transparency ensures that your policy remains valid and you have adequate coverage in the event of a claim. Non-disclosure could result in a claim denial.

    Does modding a car void insurance in Canada?

    Not all modifications will void your car insurance in Canada, but certain mods might. If modifications are made that compromise safety or significantly alter the vehicle’s performance, and you don’t disclose these changes, an insurance claim could be denied. It’s essential to check with your specific insurance provider to understand how certain modifications could impact your coverage. Changes can jeopardize your insurance validity if not properly disclosed and accounted for.

    What modifications affect car insurance premiums in Canada?

    In Canada, several car modifications can influence insurance premiums. Performance-enhancing modifications like turbochargers can increase the risk of accidents, leading to higher premiums. Cosmetic modifications such as custom paint jobs, alloy wheels, or body kits can make a vehicle more attractive to thieves, potentially raising insurance costs. Additionally, modifications that affect the car’s safety, like lowering or changing the suspension, can influence the premium as they might alter the car’s handling or crash safety.

    What counts as a modification for car insurance in Canada?

    For car insurance purposes in Canada, a modification is generally any change made to a vehicle that deviates from the manufacturer’s standard specifications. This can include performance modifications like engine upgrades, cosmetic changes like custom paint or decals, audio system upgrades, tinted windows, aftermarket wheels, or alterations to the car’s structure or chassis. Even seemingly minor changes can count as modifications and should be disclosed to the insurance provider to ensure proper coverage.

    Does car insurance cover modifications?

    Car insurance can cover modifications, but you must notify your insurer about any changes to your vehicle to ensure they’re included in your policy. If modifications are disclosed and correctly accounted for in the policy, they should be covered. However, if they’re not declared, there’s a risk that any claim involving the modifications could be denied. Some insurers charge additional premiums for certain modifications due to the increased risk they pose, while others might not cover certain types of modifications at all.

    What car modifications are illegal in Canada?

    In Canada, the legality of car modifications can vary by province or territory, but some general rules apply nationwide. Examples of illegal modifications might include overly tinted windows that reduce visibility; changes to the exhaust system that increases noise beyond allowed decibels or bypass emissions controls; and alterations to the vehicle’s structure, such as cutting the frame, that can compromise its safety. It’s essential to check specific provincial and territorial regulations before making any modifications to ensure compliance with local laws.

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    Arthur Dubois is a personal finance writer at Hardbacon. Since relocating to Canada, he has successfully built his credit score from scratch and begun investing in the stock market. In addition to his work at Hardbacon, Arthur has contributed to Metro newspaper and several other publications