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Vehicle modifications can affect insurance premiums

By Gillian Birch

Everyday we see them on our streets -- customized vehicles with non-stock spoilers, enhanced engines, raised suspensions and the like. Needless to say that the post-manufacturer auto modification business is a booming one.

But while adding performance parts and 'styling' features to your vehicle can give it a distinct appearance and improve performance, they may also have an impact on your auto insurance. So before you add a turbo-charged engine, stylish rims or even tint your windows, it is a good idea to contact your insurance broker or insurer to make certain you have the right coverage.

Insurance expert Mauro Convertini from Aviva Canada, points out how vehicle modifications can increase risk and premiums as a result. He explains, “certain modifications can put motorists at a greater risk of having a collision, such as a lowered or raised suspension, or increasing the size of your engine. Your vehicle could become untrustworthy on the road and [affect] your safety as well as your access to coverage.”

Even modifications you would expect to better the insurance risk of your vehicle, like an improved brake system, may still increase the cost of insurance for the following reasons:

• The modifications might increase the value of the vehicle and then the insurer has to pay out more in the event of a claim.

• Modified vehicles often are more attractive to thieves, increasing the risk of theft.

• Vehicles with performance modifications generally mean that the performance of the vehicle is improved, which can lead to more severe accidents.

An insurer could refuse to pay a claim and even leave you uninsured if you have not disclosed modifications to your vehicle. So before you invest time and money on a project that could raise your premium, call your broker or insurance company and verify that your insurance will remain valid.

News Canada story posted Aug. 5, 2009.

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