06-30-08: Everyone, from the world's automotive elite to the average suburban driver wants to find lower rates on automobile insurance, but if your car is at all out the norm, doing so is much more difficult than it is when you drive something typical like a subcompact or a minivan. In fact, if you drive an exotic car (like a Ferrari or Lamborghini), or any high-performance vehicle, especially if your car is also modified from the standard offering such as a Roush Mustang, finding insurance becomes harder still.
The good news is, insuring a modified car is becoming easier as more people get involved in tuning, collecting and racing. Even so, one thing that hasn't changes is that insurance companies still base your coverage premium on the risk profile of both you and your vehicle.
Street vs. Show
From the insurer's point of view, there are only two kinds of modified cars: street racers and show cars, and the latter tend to be easier to insure, because they tend to be driven almost exclusively in warm sunny weather, for extremely short durations, and stored in locked garages, all of which minimize risk. They're also more likely to have a driver or owner present, and less likely to be stolen.
Street racers, on the other hand, are much more likely to be driven hard and fast (high speeds, high RPMs), in bad weather, by young or inexperienced drivers. They have a higher likelihood of being involved in an accident, being on the road at night, getting stolen, or being parked on the street (or at least, not in a garage). All of these things add up to more risk, which means higher insurance premiums, because the insurance company must charge enough to offset any possible claim.
Always Disclose Your Modifications
What both types of car have in common, however, is that the type and amount of modifications affect the cost of coverage. Small modifications, like adding alloy wheels, aren't likely to cause a lot of difference in insurance costs, though there will be an increase in both the value of your car and the chance it will be stolen. Major modifications, especially if they include engine modifications, will definitely cause your insurance premiums to go up, because they increase the risk of an accident. As well, your insurance company may give you a quote with a higher excess when covering accidents or theft for such a car. Other modifications, such as performance exhaust systems, body kits, and lowered suspensions, are generally considered on a case-by-case basis.
This is just one of the reasons you must disclose your modifications, ideally before you make them. The other reason you must discuss mods with your insurer is that not doing so could result in your insurance being voided, which means no coverage at all if you are in an accident.
Finding the Best Insurance
There are a few way to get discount auto insurance on a performance vehicle with modifications. One is research, and the other is to reduce your risk profile.
• Research by comparing the insurance premiums of many companies, and making sure you ask specifically about the modifications you have completed or have planned. Be sure to ask if you can modify the car after the fact. Ask friends who have vehicles similar to yours where they found their insurance but also ask your existing insurer for a referral if they can't handle what you need.
• Reduce your risk profile by becoming a conscientious driver. This doesn't mean driving conservatively, but it does mean obeying traffic laws, never getting a ticket, never speeding in residential areas, never ever driving under the influence, and even taking a performance driving class to improve your skills behind the wheel.
Become an Active Participant
Finally, if you are in a crash after you have coverage for your modified car, you will have a much greater chance of being reimbursed for what your car is really worth if you become an active participant in the process. Most modifications increase what you've spent on the car without similarly increasing the value (adding a $5,000 stereo system to a $2,500 car does not mean the car is worth $7,500, for example). You can help your cause in a few ways:
• If your car is written off (totaled), keep as many parts as possible for your next car.
• Use the evaluation period (the time between when your insurance company's investigator assesses the damage and when their evaluation company sends back a value) to find "comps" – comparable cars to yours, in worse condition, appraised at higher values.
• Provide a detailed list of all your modifications to the investigator.
Driving a performance vehicle is always more risky than driving the family SUV, but you driving without proper insurance is not a good Idea.