So you're thinking about building a cool modified street car; but before you get started, you need to consider your car insurance premiums. Insurance for a modified street car used to be hard to come by, but things have changed a bit. However, one thing that hasn't changed is the way in which insurance companies determine the insurance premium for your vehicle. It's all about the risk profiles of the driver and the car; and insurance companies tend to determine your risk profile by placing you as a driver into categories like gender, age, income, etc. and the same goes for your car.
As far as car insurance companies are concerned, there are two types of modified street cars: show cars and street race cars. Show cars are likely to do extremely low mileage, usually in warm sunny weather, and are usually drives very carefully. They are also less likely to be stolen, and more likely to be garage parked at night. All of this is good news for your insurance broker. A street racer however is a different story. These cars are more likely to be abused, involved in accidents, driven in all weather, driven fast and at high RPM, stolen, parked in the street, and driven by 'boy racers'. As a result the insurance companies have to charge a large enough premium to cover any possible claim. How much the insurance increases deepens upon the type of modification.
Car modification can be performed at many levels; from small modifications such as fitting alloy wheels, to major modifications such as fitting a forced induction system. Small modifications are not likely to cause a great impact on your insurance premium and will only increase the value of your vehicle and increase the likelihood of it being stolen. Proper security measures, such as fitting an alarm system, and fitting lock wheel nuts to alloy wheels might help you avoid an increase in your insurance policy. However, major modifications and engine modifications will cause an increase in your car insurance premiums as they greatly increase the risk of the vehicle being involved in an accident. The insurance company might also quote with a higher excess when covering the risk of theft or accidents. Most insurance companies will consider other modifications, such as fitting performance exhaust systems, body kits, and lowering the suspension, on a case by case basis.
Disclose Your Modifications
The important thing is to disclose your modifications. You may be tempted not to disclose the modifications you've made to your car, so that your premiums remain relatively low. However, this is not a wise move as, technically, you are not covered if you do not disclosed any modifications you've made. If you had an accident, the assessor from the insurance company can, and probably will void your insurance policy if the assessor notices any undisclosed modifications. And I'm not just talking about engine modifications, even if you fit a set of alloy wheels, or a body kit after you have signed an insurance policy, you must disclose your modifications to you insurance company.
What You Can Do
To find the best car insurance for your modified car, you'll need to do quite a bit of research. If the car is already modified, search the Web and phone around for the best modified car insurance quote you can get, based on the modifications made to the car. Remember to find out what the excess would be in case of theft and accidents. If you intend doing some modifications, contact your existing insurance company and find out how the modification would impact on your insurance premiums. Find out if another insurance company will offer you better premiums but remember to take the excess into account.
But it doesn't stop when you've got your modified cars insured. As I've mentioned earlier, car insurance companies determine your risk profile by placing you into a category that says something like "under 21 year old male driving a souped up Nissan 200SX has a high accident risk". This is because the driving behavior of other drivers in your age group and gender has resulted in numerous accidents that have cost the insurance industry. As a driver of a modified street car you have a greater responsibility to your fellow road users and your fellow modified car owners. You also need to have greater respect for your car. More power on wet roads means a greater probability of sliding and locking your brakes at a stop. What you can do is be a conscientious driver rather than a conservative driver and never kid around behind the wheel, never drive under the influence, never speed in residential areas, know when you can apply the power, and learn what to do when the car goes into a slide. An advanced driving course should do the trick for the latter as it takes a lot of courage and skill to turn a front-wheel vehicle into a slide, or to release and reapply the brakes when the wheels lock up. If you drive conscientiously, you would be less likely to be the cause of an accident and you would contribute to improving the image of car owners like you and me, and bringing down the premiums for modified car insurance.
What Happens When You're Involved in a Crash?
You've got your modified car insurance covered but you're involved in a crash. Depending on the extent of the damage, your insurance company will determine if your car is a write off by comparing the estimated repair costs of the car against the estimated value of your car. If the estimated repair costs exceed the estimated value, the car is considered a write off. However, when it comes to modified cars, the estimated value of the car after the crash can become quite contentious. Most modifications will push up the amount of money you've spent on the car without adding a similar amount to the value of the car. Fitting a $5,000 stereo to a $2,500 car, for example, won't push the car's value up to $7,500. In such cases you may save a significant amount of money by keeping the parts for your next car. So it may be worth fighting the insurance company on their estimated value of your car. To do that you need to understand how the insurance company operates.
After the crash, the insurance company will usually take a few days to get the estimated value for your car. What the insurance company does is enter your car's information on a computer and send it off to an evaluation company, which then finds similar cars to yours that were recently sold and comes up with an average based on those cars' resale value. This value they send back to your insurance company. By the time the adjuster comes back with this value, you should have already done your own research. You need to look for recent sales information on cars similar to yours in model year, options, mileage, and aftermarket modifications. Look for cars that are in worse condition than yours but are going for a relatively high price as the insurance company will have a hard time arguing you down if a car with more mileage and less options than yours is going at a higher price than their estimate.
All is not lost if the repair costs still exceed the value of the car. You can still keep salvage if you have a place you to store the car. The insurance company will deduct the salvage amount from your claim check if you keep salvage but you must move the car from the tow yard as soon as you reach settlement with the insurance company. Remember the insurance company is responsible for tow and storage fees up to the settlement date; after settlement date tow and storage fees become your responsibility.