Modified Car Insurance

Modified car insurance covers vehicles modified from their original factory specifications, especially through custom parts or equipment. It comes as a custom parts and equipment (CPE) add-on to a standard car insurance policy, though specialty providers offer it as a separate policy.

A modified car is any vehicle modified from its original factory specifications, but what qualifies as a modification varies by insurance provider. Modifications include performance upgrades, aesthetic changes, functional additions or accessibility features.

Each insurer applies its own guidelines for what counts as a modification. Performance upgrades, aesthetic changes and accessibility equipment all fall under the category. Each of them affects your policy differently.

Modifying a car increases insurance costs because of the added value to the vehicle. Modified cars face higher theft risk, and performance upgrades like more powerful engines increase speeding potential.

Some modifications raise your car's value, and others lower it. Tell your insurer about any change before you make it.

Riskier or more expensive modifications raise premiums. Talk to your insurer before making changes because undisclosed modifications can get you dropped from your policy.

Modification types that push rates up:

• Custom parts make the vehicle more attractive to thieves, raising theft risk.
• Aftermarket parts cost more to replace than factory components.
• Performance upgrades like engine tuning or exhaust systems raise accident risk, especially on sports cars.
• Specialty parts take longer to source and repair, which extends downtime and increases repair costs.
• Value-boosting upgrades raise your car's overall value, which raises the insurer's claim exposure.

Safety improvements and theft deterrents can qualify for car insurance discounts.

Modification types that bring rates down:

• Anti-theft systems like GPS tracking or kill switches reduce theft risk.
• Safety upgrades such as roll cages or racing harnesses reduce accident severity.
• Defensive technology like backup cameras and collision avoidance systems lower accident frequency.
• Security tools like immobilizers and steering wheel locks cut theft exposure.
• Value-reducing modifications lower the car's overall value, which lowers the insurer's payout ceiling.

Standard car insurance won't cover modified car parts. You need custom parts coverage, which insurers offer as an add-on. Without it, you'll pay out of pocket when those parts are damaged or stolen.

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.

Your policy could be canceled if you don’t tell your insurance company about your car’s modifications. 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 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 modifications and budget.

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:

Check state laws before modifying a vehicle or buying one that's already been modified.

Standard policies exclude custom upgrades, but modified car insurance covers them. Performance upgrades, aesthetic changes and accessibility equipment all require disclosure and appropriate coverage. Tell your insurer what you've done before assuming you're covered.

Get quotes from at least three insurers. Custom parts coverage can be added to an existing policy or you can move to a specialty insurer that focuses on modified vehicles. Your coverage level should match your vehicle's true value after modifications (our guide to how much car insurance you need walks through that calculation).

MoneyGeek answers frequently asked questions to help you better understand auto insurance for modified cars.

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:

• 40-year-old male driver
• Toyota Camry LE
• Clean driving record
• 12,000 miles driven annually

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: 

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $100,000 property damage liability

For state-specific comparisons, we used 50/100/50 coverage: 

• $50,000 bodily injury liability per person
• $100,000 bodily injury liability per accident
• $50,000 property damage liability

We adjusted this baseline profile by region and coverage type to show how premiums vary based on location and protection level.

Coverage Impact for Modified Vehicles

Modified vehicles cost more to repair than standard vehicles. Comprehensive and collision coverage protect 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.