The Necessity Of Reporting Car Modifications To An Insurance Provider
When you insure your car, you are essentially making a bet with the insurance company that nothing is going to happen to you or your vehicle. Car insurance quotes are based on the value of the car as well as your driving habits and record. If nothing happens, then the insurance company wins and keeps your premiums. If you get into an accident, the insurance company loses and pays you to make you whole. Since car modifications alter the basic situation that the car insurance company thought it was dealing with, they insist that you tell them about it. Like it or not, since modifications more than likely will cause your premiums to rise, it's imperative that you do so. The consequences of not doing so can be more than you bargained for.
If you carry comprehensive and collision on the car, the car's value is set by the company at the time the policy is written. If car modifications such as aftermarket lights, or fancy body work or paint, or even the installation of a better stereo than the car had to begin with, this will all affect the value of the car. As well as increasing the dollar value of the car, they also make the car a more valuable target for thieves, upping the insurance company's risk. Even without comprehensive, you could still lose, if after the accident the company deems that a modification made your car more dangerous to drive, they could and probably would deny your liability claim.
The same holds true for mechanical car modifications. If you modify the engine, put a racing transmission in the car, alter the exhaust system to make it more "performance," the insurance company will have to know about it. First, because such modifications substantially increase the risk that you'll be at fault in an accident, and they want to make sure your premium matches the risk they take. Likewise, such modifications add dollar value to the car and make it a more attractive target for thieves, as discussed above, with the same results for your car insurance quote.
Also, and very important, if you make modifications on your car and don't tell the company, and the company pays a claim and after the payment discovers the unreported alterations, they may consider you to be in violation of the terms of the policy. They will naturally sue to get their payment back, certainly cancel any ongoing insurance you have with them, and perhaps even press charges for insurance fraud. That goes beyond the mere cost of car insurance quotes and may have serious legal consequences.
In conclusion, be sure to always report any vehicle modifications to your insurance company.
