Do Car Modifications Affect Insurance in Australia?
Understand how car modifications can affect insurance disclosure, cover, premiums and claims in Australia.
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A modification can change the value, performance, repair cost or risk profile of a vehicle.
That does not mean every modification makes a car uninsurable, but it does mean you should not assume your existing policy automatically covers the changed setup.
The safest approach is to contact the insurer before work begins and get the answer in writing.
Disclose the actual modification
Ask whether the insurer needs photographs, invoices, engineering or compliance documents, or an updated vehicle valuation.
Understand what the policy says
Read the policy wording for definitions of modifications, accessories, agreed value, market value, exclusions and notification duties.
Ask whether the change affects comprehensive cover, third-party property cover, theft cover or the amount paid after a total loss. If the modification increases the vehicle’s value, check whether the policy value reflects it.
Get a written response from the insurer or broker and keep it with the modification records. A phone conversation can be useful, but a dated email or policy endorsement makes it easier to confirm what was disclosed and accepted.
If the insurer declines cover for the modification, ask what alternatives are available before proceeding.
Road legality and insurance are separate questions
Insurance acceptance does not make a modification legal. Likewise, a compliant modification does not guarantee that an insurer will cover it under the existing terms.
For significant changes, check the state or territory’s vehicle rules and any certification requirements separately from the insurance conversation.
In NSW, significant modifications may require certification under the Vehicle Safety Compliance Certification Scheme. Transport for NSW advises owners to check certification requirements with a licensed certifier before modifying a vehicle.
Retain any certificate, inspection record and installation documentation.
Keep evidence for a future claim
Save invoices, part specifications, photos before and after installation, installer details and compliance documents. Record the date and odometer reading. If a modification is removable, note whether it was fitted at the time of a claim.
These records can help establish what was installed and its value, although the insurer will assess a claim under the policy and relevant law.
For a custom build, keep an inventory of major parts and receipts. Wired Build can help organise the modification history and spend, but the policy schedule and written insurer confirmation remain the reference for cover.
Update the insurer when the vehicle changes again; disclosure of an earlier setup may not cover later additions.
Questions to ask before you spend
Ask: Is this specific modification covered? Does it change my premium or excess? Does it need certification? Is the part insured for its replacement cost? Are accessories covered while attached to the car or only if listed?
What happens if a modification is found to be non-compliant? Request the answers in writing and compare policies on equivalent terms.
If you are uncertain how a policy applies, speak to the insurer or a qualified insurance adviser. General online advice cannot interpret your individual policy or predict the outcome of a future claim.
A useful insurer email checklist
Describe the vehicle, the modification, the part and installer, and whether the work changes power, suspension, wheels, bodywork or vehicle value.
Ask whether the change is accepted under the current policy, whether the premium or excess changes, and whether the modification must be listed on the schedule. Request confirmation that is specific enough to identify the actual setup.
Save the reply with the invoice and any certification. If you later add more accessories or change the setup again, ask whether the previous acceptance still applies.
Insurance details should follow the vehicle as it changes; a confirmation for one configuration is not necessarily confirmation for every future modification.
Frequently asked questions
Should I tell my insurer about wheels and suspension?
Ask your insurer before fitting them. Disclosure requirements depend on the policy and the nature of the change.
Will a modified car cost more to insure?
It may, but the outcome varies by insurer, vehicle, modification and driver profile. Get a quote for the actual setup.
Does certification guarantee insurance cover?
No. Certification and insurance underwriting are separate matters; confirm both independently.
