In simple terms, a modified vehicle is a car that has undergone changes that are not factory standard. The most common car modifications in NSW include replacing, adding, or upgrading car components like the car’s engine, chassis, brakes, body, etc. They can range from the widely used reversing cameras to comparatively less used sunroofs. You may need to check with your state or territory transport department or the local roads and traffic authority  for additional information on the permitted car modifications. 

The permitted modifications may vary across insurance companies. So, most likely, the changes allowed by your car insurance NSW provider may not be the same as those favoured by another cheap car insurance company. Therefore, you should talk to your insurance provider before taking your car to a professional to implement any appearance or performance modifications. You must also be aware that you may have to shell out more money in your premiums if you choose to get your ride modified.

What are the necessary conditions to remember before executing car modifications?

Is it legal?

Any modification made to your car must comply with the street rules before you can even think of getting your ride insured. If an insurer spots any illegal change, there is a high probability of them denying your vehicle insurance cover.

You may be susceptible to fines by the police, or your vehicle might suffer deregistration if you get pulled over for illegal modifications or, in the worst case, it may even be seized for non-compliance.

Another word of caution is that inexperienced drivers with a probationary license aren’t legally permitted to drive a vehicle with performance-enhancing modifications. If they are found to breach the laws; they may end up losing their privileges.

Is seeking approval compulsory?

If you want to perform complex car modifications, you might need approval from the state or territory transport authority. It would be best if you contacted them for clarification.

Is it mandatory to inform an insurer?

If you don’t inform your insurer about your vehicle modifications, your vehicle may not be fully covered. You may have to face policy cancellation or rejection of claims as your car is no longer compatible with the vehicle description mentioned in your policy. Also, if you don’t inform your insurer about this act and your vehicle is still under warranty, it might make your warranty null and void.

Is a market value or an agreed value policy best, given this case?

Several insurers provide you with both options. However, you need to know how they affect your claims before deciding on your cover. For example, the market value policies consider vehicle replacement value subject to depreciation. In contrast, agreed value policies are based on a mutually agreed-upon value by you and the insurer at the time of policy purchase.

With this, you need to understand that market value may not include the additional value you have added to your vehicle through significant modifications. Therefore, buying an agreed value policy may make more sense, even if you have to pay higher premiums.

Conforming to car insurance NSW rules and regulations is necessary if you don’t wish to be bothered by the police or your state/territory transport authority for any modification violations. Also, you need to comply with the insurance company’s policies around modified cars if you want to buy a policy or require the support of your cheap car insurance provider while making a claim. So stick to the rules, so your vehicle stays covered at all times!