Does Insurance Need a Report of Auto Modifications?

Should You Report Car Modifications to Your Insurer?

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Auto enthusiasts often consider their vehicle an extension of their personality. As such, they personalize it through a variety of modifications, such as custom wheels and paint jobs, bodywork, turbos, blowers, or all of the above and a whole lot more. The average driver, though, does not report these modifications to his or her insurance company. It could be as simple as the driver never thought of doing it, but often it is because the driver knows that most insurance companies prefer not to insure modified vehicles. Whatever the reason, the mods take place and the insured individuals hope for the best.

Benefits of Not Reporting Vehicle Modifications

There really is only one benefit to not reporting your vehicle’s modifications: your rate stays the same. Of course, not reporting it means there is no coverage in the event of a loss, and that is the best-case scenario.

Drawbacks to Not Reporting Your Vehicle Modifications

An insurance policy is a contract and, just as with any contract, each side has obligations. As the insured, one of yours is honesty. You must answer any questions truthfully and supply full details when asked. Not reporting your mods is “material misrepresentation,” and it may be grounds for your insurer to refuse your claim in the event of a loss.

Say you drive a good-sized pickup. You, as a law-abiding citizen, obtain the auto insurance your state requires. Your policy asks whether the vehicle has undergone modification or alteration. You answer no because you did not consider that lift kit and those oversized tires as mods when you applied for your policy. If a claim arises against your insurance, by you or a third party after an accident, your insurance company may be able to rescind your policy based on this omission. Even if the insurance company pays the claim, if it later discovers unreported modifications, it can sue you and possibly even charge you with insurance fraud. In short, it is never a good idea to neglect to mention any vehicle modifications on your insurance policy.

Conclusion

To protect yourself legally and financially, let your insurance company know about any modifications to your vehicle. If you do not, and you have either an accident or a total loss, you will be lucky if all you lose is the money you spent on the modifications.

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