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How Making Car Modifications Can Influence Your Digit Car Insurance Premium?

By Juhi Walia
20 October 2022, 1:57 PM

Who doesn't like upgrades? A car is a very precious asset to many. Many love experimenting with the latest car upgrades and adorn their vehicle with the latest accessories and functionalities.

Customizing your car to your liking or modifying it to make it look or perform better can influence the premium amount and coverage of your car insurance online plan.

If you're planning on getting a Digit car insurance policy, you need to understand how modifications to your car can affect your premium. Several factors determine automobile insurance premiums and coverage.

One of these factors is car modifications, concerning aspects such as:

  • Performance
  • Structure
  • Appearance

You must inform your insurance company before you modify your car or as soon as the changes are implemented. An inspection could be scheduled by the insurer, after which the changes in your car insurance premium and coverage will take place, if necessary.

What Exactly are Car Modifications?

Car modifications are changes in the structure, aesthetics, or functionality of the the four-wheeler.

Some common examples of vehicular modifications that can affect your Digit automobile insurance are:

  • Cosmetic changes
    Engine changes
  • Tyre or light changes, etc.

Modifications to your car will directly affect your car insurance online coverage and premium as the potential for risk increases when changes are made to the insured vehicle.

Car Modifications That May Affect Your Digit Auto Insurance

Exterior Modification

Making changes or modifying a car's external appearance is an exterior modification.

For example:

  • Changing your car's colour or giving it an eye-catching design
  • Installing attractive lights to enhance the aesthetic value of your vehicle
  • Making it more susceptible to theft and more expensive to insure.

Any such changes to the insured vehicle must be notified to the insurance company.

Interior Modifications

Interior modifications refer to changes made to the interior appearance or aesthetics of the car, like changes in the:

  • Music system
  • Car seats
  • Dashboard, etc.

These modifications may result in higher insurance premiums and should be reported to your car insurance company.

Performance Related Changes

Changes to the car's engine, filter or exhaust system, or even fuel changes can impact the car insurance online premium and should be communicated to the insurance company.

Brakes and Suspension

These are essential to the safety of your vehicle, and modifying them can affect your vehicle's performance. Any changes made should be reported to your insurance company immediately.

How Will the Changes Affect Digit's Auto Insurance? 

Digit auto insurance can either be third-party  car insurance, standalone own damage car insurance or comprehensive car insurance online, which covers both - damage to your vehicle and third-party liability in case of an accident.

Therefore, changes to the car only affect the comprehensive insurance portion, as this policy only covers damage to the policyholder's vehicle.

When issuing automobile insurance, the insurance company considers various factors that affect the cost of the vehicle when calculating the premium.

Any modification to your car's décor, aesthetics, functionality or performance will affect auto insurance premiums. Therefore, you must notify your insurance company of any such changes so they can calculate your tip based on that change.

If you don't inform the insurer about any modification you make to your car, it may make your car insurance claim null and void.

What Other Modifications Can Affect Digit Car Insurance Premiums?

Besides the impact of vehicle modifications, other factors may influence your Digit automobile insurance policy premiums. These are:

  • Insurance Type

Switching from third-party liability to a comprehensive plan gives you better coverage and the leverage to add other benefits that can enhance the premium.

  • Fuel Type

Car insurance premiums may be higher if the vehicle runs on diesel than a petrol car or a CNG car. If there is any change in the vehicle, or if you get insurance from the same provider for another diesel car, there will be a variation in the insurance premium.

  • The Car Owner's Occupation

If you are constantly on the road because of your job and use your car more often, your premium will be higher compared to other people in different professions. Vehicles that are out of the road more often because of job demands are more vulnerable to a higher accident risk than vehicles that are rarely used.

In Review

You must contact your insurance company as soon as possible before making any changes to your vehicle. The insurer will appoint an inspector to re-inspect your vehicle and work on the premium accordingly.

Failure to do so may result in the company denying your claim, so please notify it in advance. Car insurance premiums are impacted by any changes you make to the vehicle or any risk modification, specifically noted during vehicular insurance policy renewal.

Any expensive modification can be viewed as an increased risk for the insurer, for example, installing the additions mentioned below can enhance the car's value and make it more vulnerable to theft:

  • Costly and fancy lights
  • Tyres
  • Sound systems
  • Engine optimizations
  • Spoilers
  • Sports seats, etc.

Thus, it is highly recommended to keep your insurance company in the loop whenever making any modification to your vehicle – whether an upgrade or a downgrade, as it influences the premium and coverage of your insurance.

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1. What are some examples of car modifications that can lead to an enhanced premium in the case of car insurance online plans?

Some of the car modifications that can increase the premium amount are:

  • If the policyholder upgrades the car's bumper.
  • If new fog lights are installed.
  • If chrome wheels or racing tyres are added to the car.
  • If there are expensive additions like spoilers in the front and back or installation of hood ornaments, it can increase the premium.
  • Any music equipment upgrade can lead to a premium increase.
  • Addition of access lights in the car.

2. If the policyholder has made expensive additions or modifications to his car, what should he do next?

As soon as the policyholder installs anything expensive or adds value to his car, it increases the risk, as chances of theft and burglary also increase, also the value of the car increases, which would impact the premium of the car insurance online plan. If any expensive modification is not reported to the car insurer, the policy or any claim regarding any mishap will be considered null and void. To avoid this, it is essential to keep the insurance company updated in case of any modification to the car.

3. What step-by-step procedure should the policyholder follow in case he has gone ahead with the addition/removal of the CNG/LPG Kit?

In case of modifications made regarding the CNG/LPG Kit, the insured must follow the below-mentioned steps:

Step 1 – Write a request letter and submit it to the insurance company, the registration certificate and the invoice copy of the LPG/CNG kit.

Step 2 – There will be a vehicle inspection, and the insurer will act based on the report of the vehicle inspection.

Step 3 – If any bi-fuel has been added, it will increase the premium value, which would have to be paid by the insured.

4. What are the car modifications that can reduce its vehicular insurance premium?

Not all modifications made to the vehicle could lead to an increase in the car insurance premium amount.

Some changes can also reduce the premium – for example, if you install an ARAI-approved anti-theft system or parking sensors, these reduce the risks of theft and accidents while reversing the vehicle.

Such modifications reduce the risk and thus reduce the premium payable towards your Automobile insurance premium.

5. Should I inform my insurer if I modify my car's suspension system and brakes?

Yes! These are essential modifications and can change the risk and cost factors associated with the vehicle. You must immediately contact your car insurance provider and notify them of such modifications.

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