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How Modifying Your Car Can Lead to You Losing Out on Your Insurance Claim

By Chanel Rick - Jun 2,2022
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Investing in a vehicle is a wise decision, but it comes with hefty maintenance costs. Furthermore, the temptation to revamp your car might persuade you. And, why won’t they? Everybody wants attractive cars with pretty seat covers, stylish mats or a flashy new paint job. 

But before diving head-first into this decision, hear us out. Did you know? Under Section 52 of the Indian Motor Vehicle Act, 1988, structure altering modifications are illegal. Furthermore, certain major car modifications could impact your car insurance, increasing its premium. Many people give in to the temptation of personalising their car without adequate research on how it could affect them in the long run. 

Car Modifications: Research first! 

To further emphasise, Section 52 states that any alterations that drastically change the original structural details when manufactured are illegal. If ignored, it could lead to legal prosecution, heavy fines and court notice to remove the alterations. Some illegal modifications include customised number plates, pressure horns, loud exhausts, dark sun film, modified headlights and taillights, extra-wide tyres, etc. 

Now, wanting to add a personal touch to your car is understandable, but car insurers perceive this differently. Depending on the type of modification, your policy premium could potentially hike up. Furthermore, modified vehicles are associated with higher risks in contrast to ordinary cars for the following reasons, 

● Customisations are often done by young drivers 

● Insurance companies view such individuals as unsafe drivers 

● The replaced or upgraded parts may cost more than the original price, or even the car itself 

Understanding Safe Car Modifications 

Don’t be discouraged, though! While transforming your car could impact the insurance, there are a variety of modifications that are considered safe. With enough research and knowledge on these matters, you could still indulge in these desires without losing out on insurance coverage. 

Here are a few modifications that are unlikely to impact your car insurance claim. 

● Opting for other fuel options 

● Changing the colour of your car 

● Fitting in rain visors 

● Adding bumper corner protectors 

● Upsizing the tyres and wheels for a cheaper variant (within limits set by the carmaker) 

● Engine swapping, with prior permission from the RTO 

These are safe alterations that can be made without incurring legal trouble. Or claim rejection from insurers. Enquire about safe car modifications or minimal changes for your vehicle that don’t impact the overall premium. 

4 Car Modifications that Impact Insurance Premiums 

Been contemplating modifying your car? Then this next section is crucial for you. Besides considering illegal modifications, gauge those that could alter your insurance premium. Additionally, the insurer has the right to reject claims made for un-notified car modifications. 

1. Wheel Modifications 

Upgrading to fancy alloy wheels or switching to broader tyres can hike your premium by 8% or 18%. These high-end products are especially prone to theft. Hence, insurance companies charge higher premiums to cover theft or damages for these products. 

2. Engine or Performance Modifications 

Increasing your horsepower is doable, but it comes at a high-cost premium-wise! With this performance boost, you might be tempted to over-speed or act recklessly on the roads, making you susceptible to accidents. Engine upgrades like turbocharging can increase your premium by 132%. 

3. Exterior Modifications 

Upgrading the appearance of the exterior of your car can increase the premium by 12-66%. These include modifications like tinted windows, decals/stickers, light changes, bonnet bulges, etc. Since your car will look more appealing to vandals, it becomes a potential target for delinquent behaviour. 

4. Interior Modifications 

Modifying the car’s interior body could compromise its safety, making it more prone to severe damage in case of an accident. Insurers will charge you a heavier premium to cover these costs. Modifications like car seat upgrades increase the premium by 27%, followed by upholstery and dashboard upgrades at 16%. 

The next time you think about modifying your car, ensure it complies with the law. And the rules of your insurance provider. Spread this information to prevent your family and friends from making an expensive mistake!

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Bajaj Finserv Direct Limited ("BFDL") is primarily engaged in distribution of financial products and services through its digital platform (“Bajaj Finserv MARKETS”) and inter alia renders services of customer acquisition, providing preliminary credit support activities, fulfilment services and post-acquisition customer services to Banks, NBFCs, HFCs. BFDL is also a registered Corporate Agent (Composite) under valid IRDAI registration number: CA0551 valid till 10-Apr-2024 for solicitation and servicing of Insurance Products. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522