Modified Car Insurance

Compare instant online car insurance quotes to help you find suitable cover for your modified vehicle.

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, updated on February 15th, 2024       

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Car Insurance Banner - Older man polishing the front of his classic convertible car.

Are you the proud owner of a modified car? If so, you'll want to make sure it's properly insured. Many standard car insurance policies won't cover the cost of repairs or replacement for modifications like custom rims, spoilers or performance upgrades. That's where modified car insurance comes in, offering coverage specifically designed for your unique vehicle.

If you're looking for the best modified car insurance options in Australia, you can compare instant offers online from some of Australia’s most trusted insurers. Get started with a free, no-obligation quote.

What is a vehicle modification and can they be covered by car insurance?

A vehicle modification is any alteration or addition made to a car which deviates from the manufacturer's original design or specifications. Modifications can include changes to the engine, suspension, wheels, exhaust and other parts.

Car insurance companies in Australia may cover modifications if they’re disclosed and agreed upon at the time of purchasing the policy. This agreement will largely hinge on whether they satisfy the terms and conditions of coverage set in place by the insurer.

However, some modifications may be considered high-risk or illegal, which could result in higher premiums or policy exclusions. It's important to disclose all modifications to your insurer to provide peace of mind that you can have financial protection in the event of a covered accident and know what is and isn’t covered by your policy.

What modifications can be covered by car insurance?

Some of the common modifications which can be approved for vehicles in Australia and covered by car insurance include the following:

  1. Spoilers and body kits
  2. Alloy wheels
  3. Aftermarket exhaust systems
  4. Suspension upgrades
  5. Sports seats or steering wheels
  6. Performance brakes
  7. Window tinting
  8. Roof racks
  9. Sunroofs

Of course, whether each of these is covered will depend on whether they’re disclosed and agreed upon at the point you purchase your policy or when they’re added.

However, it’s important to note some of the modifications which may not be covered by a car insurance policy. These can include:

  1. Aftermarket custom paint work or wraps
  2. Super or turbocharged engines
  3. Nitro or hydrogen fuel-equipped engines
  4. Roll bars or cages

If you’re unsure about what can and can’t be covered by your insurer, it’s crucial to check with them before buying your policy or making the modification. It’s also important to check with your state government to confirm what is and isn’t permissible when it comes to vehicle upgrades. For instance, in New South Wales, the state government outlines vehicle standards which all vehicles registered in the state must abide by.

You can compare instant car insurance quotes through our 100% free online comparison service. This can help you find out key information about each of the insurers on our panel to make it easier to determine which offers the best policy for your needs. You can get started with a no-obligation quote today.

Do vehicle modifications affect my car insurance premium?

Vehicle modifications can affect your car insurance premium in Australia, though this will depend on the nature of the modifications. Generally, those which increase the risk of accidents or theft, such as engine modifications or body kits, may result in a higher premium.

Insurers may also consider the cost of repairing or replacing modified parts in the event of a claim. However, minor modifications such as slightly tinted rear windows are less likely to impact your premium.

On the other hand, modifications which improve safety, such as installing a rear-view camera or parking sensors, may result in a lower premium. This is because having such features may reduce the likelihood of a claim, even if they increase the overall value of your car.

What are market value and agreed value and why are they important for modified car insurance?

Market value and agreed value are the two main types of car valuations used by insurance companies to determine the payout amount in the event of a total loss claim such as a write-off or theft.

Market value refers to the current value of the vehicle in its current condition, which takes into account the make, model, age and condition of the car. Agreed value, on the other hand, is an agreed-upon value between the insurer and the policyholder at the start of the policy, which will be the payout amount in the event of a total loss claim.

For modified car insurance, agreed value is particularly important as modifications can significantly alter the value of a vehicle, as well as the sentimental value for the owner. By agreeing on a specific value at the start of the policy, you can ensure you’ll receive an appropriate payout in the event of a covered total loss claim. It’s important to note that agreed value policies are generally the more expensive option of the two.

Market value may not accurately reflect the value of the modified vehicle, particularly if the modifications increase the car's value beyond the average market value for that make and model. That’s why it's important for policyholders to accurately declare any modifications to their insurer to ensure they are covered for their full value.

Types of car insurance you can choose from

Top tips for saving on your modified car insurance premium

Increase your excess

Increasing your excess can lower your premium, as you’re agreeing to pay a higher amount out of pocket in the event of a claim. This reduces the insurer's risk, which is typically rewarded with a lower overall premium.

Keep your vehicle parked safely

Parking your car in your driveway, carport or garage can positively impact your premiums, as the level of risk a luxury vehicle is exposed to is lessened compared to what it may be if you kept it parked on the road or in a public carpark.

Maintain a strong driving record

Keeping a strong driving record is always a good idea, as insurers look at your history when determining your rates. By avoiding accidents and traffic offences, you can show you're a responsible driver and potentially qualify for lower rates.

Compare policies

Comparing policies is also a good way to save money on your modified car insurance. By getting an online quote, you can compare offers side-by-side to help you find the best possible coverage for your needs from a range of trusted insurers.

Common questions about modified car insurance

Are there any car modifications which are illegal in Australia?

Yes – there are several car modifications which are illegal, such as:

  • Tinted windows which exceed legal limits
  • Certain types of loud exhaust systems
  • Modifications which lower the height of the vehicle enough to risk hitting roads and bumps
  • Replacing tyres with new ones which don’t comply with the manufacturer’s loadbearing capacity specifications
  • Replacing seatbelts with belts which don’t meet safety standards, such as harnesses


These modifications can result in fines, loss of insurance coverage and even vehicle deregistration.

Are all car accessories covered by vehicle insurance?

Some insurers will automatically cover all legal accessories under their standard car insurance policies. However, it’s still important to let them know of any accessories you have, as this can impact how they value your car.

Will I be able to get insurance for my modified classic car?

You can take out insurance for your modified classic car, provided it meets your insurer’s eligibility criteria. However, not all standard insurers will offer coverage for classic vehicles, so it may require a policy from a specialist insurer. Classic car insurance policies are designed to cover the unique needs of vintage and classic cars, on which modifications are common as part of the upgrade and maintenance process.

What types of insurance can I purchase for my modified car?

You can purchase several types of insurance for your modified car, including comprehensive, third-party fire and theft and third-party property damage. Comprehensive insurance is the highest level of coverage and will cover damage to your vehicle as well as damage to other people's property, while third-party property damage will only cover damage to other people's property. Compulsory third party insurance is mandatory for all vehicles registered in Australia, so you’ll need to make sure you have this when buying your car.

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