Depending on the modifications you want to make on your car, your insurance policy could be affected positively or negatively, and possibly by a lot.
It’s important to know this before you go through with the changes, because some of them might void your policy if not reported or if not installed correctly, and some modifications are illegal.
All modifications in Australia need to be approved by your state or territory’s motor vehicle licensing department. They also must comply with all road rules and regulations, the Australian Design Rules (ADR), and the National Code of Practice for Light Vehicle Construction and Modification (NCOP).
It’s also important to notify your insurance provider if you make any modifications during your policy term because failing to disclose them could result in being excluded from insurance pay-outs in the case of an accident.
So, which upgrades will lower or raise your premiums? Take a look at the list below.
Some insurers consider this a safety upgrade, so adding parking sensors is not only a helpful safety feature to install, but also a great way to lower your premiums.
Installing a towbar won’t increase your premiums as some people think. They might even lower them. Cars are most often involved in rear-end collisions, and in some cases, having a towbar installed has acted as a buffer, therefore saving the vehicle from damage to the back bumper.
The somewhat recent trend of tinted windows saw a police crackdown on super dark upgrades. Tints that are so dark they restrict more than 70% of light coming in will void your insurance policy.
DIY installations of window tints make this a risky upgrade for that reason – the likelihood of too-dark tints is increased. Make sure you use legal car tints when installing them so your policy isn’t affected and you don’t risk heavy penalties.
Fitting your car with alloy wheels or wider tyres requires notifying your insurance company and may affect your premium. Wheel modifications can drastically alter the handling of your car, plus wheel upgrades will increase your car’s value, so insurers take note.
As a side note, winter tyres are seen as a positive addition by insurers but probably won’t affect your premiums either way. Regardless, they are a good idea for added safety in difficult driving conditions.
If you modify your car’s paintwork, the new colour could affect your premium. Custom and specialised paintwork, including adding decals, can carry an increase. Some colours make a difference; statistically, white cars are involved in fewer accidents while drivers of black and red cars are charged higher premiums, and red and blue cars are the most popular targets for thieves.
If you plan on making modifications to the engine, transmission, or air filter, you must notify your insurer. Adding a turbo or supercharger will certainly affect the cost of your premium as it increases the risk of accident, and some mainstream insurance companies won’t even cover such an upgrade, as well as nitro or hydrogen fuel-equipped engines, so make sure you do your due diligence before committing.
Beware – there are a few common car modifications that are against the law and will void your insurance:
- Tinted windows that restrict more than 70% light (as mentioned above)
- Under car neon lights
- Illegal wheel modifications, like increasing tyre diameter
- Sound/noise modifiers, including exhausts
As long as you research your modifications before making them and double check everything is above board, you can enjoy your upgraded car without worry.