Updated: July 16, 2025
Advertising & Editorial Disclosure
Modified car insurance covers upgrades or changes made to a vehicle that differ from its original factory design.
Top providers for modified car insurance include 21st Century, Allstate and Elephant, all of which offer custom parts coverage.
If you don’t disclose modifications to your insurer, your policy could be voided, leaving you fully responsible for any damages or legal costs.
Modified car insurance is coverage designed to protect vehicles that have been changed from their original factory specifications, especially through custom parts or equipment. It typically comes in the form of a custom parts and equipment (CPE) add-on to a standard car insurance policy, though specialty providers may offer it as part of a separate policy.
A modified car is any vehicle that has been modified from its original factory specifications, but what qualifies as a modification can vary by insurance provider. Modifications can include performance upgrades, aesthetic changes, functional additions or accessibility features.
While modifications improve a car's functionality or performance, they aren't always for the better. Some modifications can lower the actual cash value of a car.
Modifications can impact your car insurance in different ways depending on the provider, as each insurer has their own guidelines for what counts as a change. Generally, modifications fall into categories like performance upgrades, aesthetic enhancements and accessibility features. Below, we break down the common types of modifications that could affect your coverage or premiums.
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.
Often, modifying a car increases insurance costs 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.
However, certain modifications may lower a car's value. It’s always best to discuss the changes to your vehicle with your insurer.
Certain types of modifications are considered riskier or more expensive to insure, which leads to higher premiums. Always discuss planned modifications with your insurer beforehand to avoid higher premiums or being dropped from car insurance.
Below are common modification types that can increase your rate and the reasons why.
Not all modifications raise your premiums. Some can improve safety or reduce theft risk, which may qualify you for car insurance discounts.
Standard car insurance doesn't cover modified car parts. You'll need to purchase custom parts coverage, usually offered as an add-on. Skip this coverage, and you could face significant out-of-pocket costs when something goes wrong.
A driver with $5,000 in customized equipment coverage and a $500 deductible experiences damage to their suspension lift kit in an accident.
$5,000With proper custom parts coverage, insurance pays $4,500 for the suspension repair ($5,000 coverage minus $500 deductible).
$500This is 90% less expensive.
Consider an agreed value policy if you have a modified car. This policy lets the insurance provider settle the car's worth and any modifications. Your insurance company and an appraiser will decide on the value of your car, including modification costs in case of total loss. Instead of just the car's actual cash value (ACV), your policy will cover the agreed-upon settlement amount 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 entirely.
If you don’t tell your insurance company about your car’s modifications, your policy could be canceled. That means no coverage in an accident, and you’d have to pay out of pocket for damage, injuries and even legal costs.
This can happen with any kind of upgrade — from engine changes to custom paint or sound systems. If you’re in an accident and your insurer discovers undocumented modifications, your policy could be invalidated, even if the accident wasn’t your fault.
The best insurance for modified cars is a policy with custom parts coverage. When shopping for auto insurance, look for companies that offer this add-on coverage. It covers damage to permanently installed custom parts.
Before purchasing a policy, review all terms and features included. Compare quotes from different modified car insurance companies to find the best coverage for your specific modifications and budget.
Company | Description |
|---|---|
Offers custom parts coverage as an add-on. This covers damages to equipment, not included in the vehicle manufacturer’s standard specifications. | |
Policyholders may opt for custom parts coverage in their car insurance for $102 per year. This covers losses to custom equipment due to a comprehensive or collision claim. | |
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 items 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 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.
For high-value or extensively modified vehicles, consider these specialty insurers:
Specialty Provider | Best For | Key Features |
|---|---|---|
Hagerty | Agreed value coverage, guaranteed repair network, roadside assistance | |
J.C. Taylor | Antique and custom vehicles | Flexible usage policies, restoration coverage, spare parts coverage |
Grundy | Classic cars and hot rods | No depreciation, guaranteed value, low premiums |
American Collectors | Modified and performance cars | Track day coverage, modification-friendly policies |
SAFECO | Performance modifications | Custom equipment coverage up to $5,000, agreed value options |
Before modifying your vehicle or purchasing a pre-modified car, understand state laws and the legal implications of vehicle modifications:
Tampering with emissions control systems is federally illegal and can void insurance coverage, while modifications must comply with Federal Motor Vehicle Safety Standards (FMVSS). Modified vehicles may face additional scrutiny during state inspections, and exhaust modifications must comply with local noise regulations.
When purchasing a vehicle that's already been modified, get insurance quotes first, since some insurers may refuse coverage for certain modifications. Document all modifications by obtaining receipts, installation records and part specifications. Have a qualified mechanic conduct a professional inspection to assess the quality of modifications and verify that all modifications meet local and federal regulations and state insurance requirements through a legal compliance check. Consider getting a professional appraisal for high-value modifications to establish agreed-upon value coverage.
Maintain comprehensive records for insurance purposes including purchase receipts for all parts and labor, professional installation certificates, before and after photographs, appraisal documents for high-value modifications and legal compliance documentation.
Modified car insurance protects custom upgrades that standard policies may not cover. The key is finding insurers that offer comprehensive custom parts coverage and understanding how your specific modifications affect your rates and coverage needs. Whether you have performance enhancements, aesthetic modifications or accessibility equipment, proper disclosure and appropriate coverage are essential for protecting your investment.
For the best financial protection, compare quotes from multiple insurers and switch to better coverage if needed, including both traditional providers with custom parts add-ons and specialty insurers that focus on modified vehicles. Remember that the cheapest option isn't always the best; prioritize comprehensive coverage that matches your vehicle's true value and modification level based on how much car insurance you need.
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. 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. A modified car may be more expensive to insure because of these factors. However, there may be modifications that don't lead to higher insurance premiums. The best way to check is to talk with your insurer.
Failing to disclose modifications can result in policy voiding due to material misrepresentation. This leaves you personally liable for all damages, injuries and legal costs in an accident.
Disability-related modifications are protected under ADA guidelines, and many insurers can't discriminate against them. However, you should still disclose these modifications and consider custom parts coverage for expensive accessibility equipment.
Most insurers will not provide coverage for modifications that violate federal or local laws, such as emissions tampering or illegal performance enhancements. Ensure all modifications comply with applicable regulations.
An agreed value policy is recommended for heavily modified or high-value vehicles. It establishes a predetermined payout amount that includes your modifications, protecting you from depreciation and ensuring fair compensation.
Our Research Approach
We gathered 22,848 quotes from six major providers across 100 ZIP codes to determine modified vehicle insurance costs and identify which companies offer the most competitive rates for drivers with vehicle modifications.
Sample Driver and Vehicle Details
Our baseline profile included:
Data Collection Process
We pulled rate information directly from state insurance departments and Quadrant Information Services, testing quotes across 100 ZIP codes nationwide to analyze 22,848 total quotes from six major insurers.
Coverage Levels We Tested
For national averages, we used 100/300/100 coverage with comprehensive and collision and a $1,000 deductible:
For state-specific comparisons, we used 50/100/50 coverage:
Coverage Impact for Modified Vehicles
Modified vehicles cost more to repair than standard vehicles. Comprehensive and collision coverage protects your investment when accidents happen, while liability coverage provides financial protection if you cause damage to others. Your deductible is what you pay before insurance covers the rest.
We adjusted this baseline profile by region and coverage type to show how premiums vary based on location and protection level.
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.
