Modified car insurance is for cars that have been altered or changed for better performance. These types of cars are often referred to as drag cars or street cars and finding insurance companies to cover them can be difficult. Modifications to cars make it harder for insurance companies to give an accurate estimate of value or to assess risk. New techniques and technologies are making it easier to find insurance for your modified car, though there are still a few snags in the system.
Types of Modified Cars
There are two types of modified cars in the system. These are street and show cars. Of the two, street cars are by far the harder variety to insure. Street cars are harder to insure due to the nature of the modifications and the overall tendencies of street car drivers.
Performance modifications like suspension, engine tuning, filters, exhaust, and other minor changes can greatly increase the likelihood of an accident. Even aesthetic modifications can make insurance rates go up as these changes make the car more appealing to thieves and vandals. Aesthetic modifications include body kits, tints, and spoilers. It’s important to note that the drivers of modified cars tend to be younger, less experienced people. They get into more accidents as a group and thus cost significantly more to insure.
So what should you do if you happen to live in Toronto and you have a modified car? You need to make full disclosure to your potential insurer regarding all modifications to your car. Undisclosed changes can be a reason to cancel insurance and deny a claim, leaving you responsible for any damages resulting from an accident.
Not all modifications are treated equally from an insurance standpoint. Expensive rims and engine boosters can add value to the car, but they almost always increase insurance rates. Other modifications like custom exhaust systems or body kits are usually considered on an individual basis.
Other mods can lower your premium to help offset the costs of the modifications. Adding a high-tech alarm system is one good way, but offering to pay your policy in full is typically the best way to entice insurers into giving you a price break. Lowering your risk profile is another way you can save on your premium. Drive carefully, obey traffic laws, and take a specialized class if one is available.
Non-Standard Car Insurance Sources
The insurance industry in Canada is obligated to provide anyone who is legally entitled to drive with insurance. This doesn’t extend to individual insurance companies in the conventional insurance market, however. Every insurance company in Ontario proposes its own operating rules to the Financial Services Commission of Ontario. Once the FSCO approves these, the insurance company is bound to operate in compliance with those rules. If for example, an insurer has a rule that it will not offer policies to vehicles with high-performance modifications, it simply cannot issue a policy that violates the rule. That only applies to the regular insurance marketplace.
All auto insurers belong to an industry body called the Facility Association. Considered the insurance market of last resort, the Association works with individual insurance companies to offer speciality policies to drivers who don’t fit within regular insurance provisions. These are often drivers with serious traffic convictions such as dangerous or drunk driving convictions. Drivers of modified vehicles can also arrange coverage through the Association when there are no offers forthcoming conventionally. Facility Association coverage is expensive. Though it is hard to estimate what a modified car owner will pay, those with convictions often pay four or five times more than average drivers. Policies of $10,000 are not unknown.
There are some speciality high risk insurers and still others that specialize in show and collector car coverage. A driver with a modified car has options, though not nearly as many as a motorist driving a regular vehicle.