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Car insurance: Know which modification can lead to an increase in premium
Financial Express, July 10, 2019

If you have a never-ending love for cars and spend significant time modifying your four-wheeler ever since you brought it out of the showroom, you must know that modifications play an important role in raising the premium of your car insurance. The modifications could be anything —from a minor change in the interiors to completely revamping your car with some major alterations. Therefore, it is always better to consider the potential insurance costs that you may have to bear when you decide to modify your car.

Modification in car

One of the most important and foremost things to know is what all qualifies as modification. A car modification includes any and every change that you make to the original condition of the car. In simpler words, anything that makes your car look or perform differently from its original state is defined as modification. Optional extras offered by the car dealer are also termed under modifications, though any modification made by manufacturer before selling the car are market-approved and do not fall under modifications.

Car insurance

Insurers use different factors before quoting a final price to the insurance seeker. The two primary areas assessed by most of the insurers include risk of theft and risk of an accident. Modifications such as performance changes that increase the chances of your vehicle getting stolen come under theft risk, while under the risk of an accident, modifications concerning the look and performance of your car are included. Some of the prominent modifications that insurers consider include changes in engine, body-kits, spoilers, sports seats, etc. As per several reports, most of the road accidents in India are caused due to overtaking, high speed and other accident-prone activities. Thus, adding anything that enhances he speed of your car can increase your car insurance premium as well.

Critical changes

Before making any critical changes in your car such as upgrading the breaks and suspension of your car to improvise the car performance, it is important that you inform the insurer. Also, while making modifications to the car’s interior like steering, pedals and sound system you need to inform the insurer. As a policy seeker, it is important for you to disclose all the modifications made to your car so that in future in case you make a claim, it is not rejected citing uninformed modifications.

In case you are planning to buy a second-hand car and are not exactly aware of the various modifications already made in the car, it is better to get the vehicle examined by a certified mechanic. The chances of your claims getting rejected are highest in case you do not disclose the alterations to the insurer, intentionally or unintentionally.

Simple and small modifications may not increase the premium of your car by a considerable amount, but certain notable modifications that change the performance of the car may hike the insurance cost significantly. Thus it is crucial to inform the insurance provider about the modifications that you make to your car. This will help the insurer to analyse and decide the insurance premium accordingly.

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