Insuring a modified car?

cat007 · 12-01-2019, 10:33 PM

Hi all.

I have an FGX XR6T I'm planning on modifying such as a tune and injectors.
My current insurer (real insurance) won't insure if the car has performance modifications.
Any suggestions on who you guys use that have modified your cars?

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arronm · 12-01-2019, 11:14 PM

Shannon's. They insure all my vehicles. Most are modified.

**GO FURTHER** · 12-01-2019, 11:44 PM

I went through this exercise a week ago, as the renewal came up for my Mustang.
So I decided to use "Compare the market" .com.
I was with the RACV, who are the best when it comes to car insurance in Vic I've found, but not the cheapest.... One of the more expensive ones.

Anyway, Budget Direct and Virgin came up as the cheapest, after I input all my details.
Both were more than half the price of the RACV.

Went I went to buy with both (you have to ring up after getting your online quote) and speak to a sales member from those companies... Both flatly refused to insure my Mustang because I had increased the performance through a tune.
It was not even a question of paying a higher premium... They simply would not insure me.

I ended up sticking with the RACV who don't care about modifications.
Their attitude is as long as the car is roadworthy with them, they are only going to pay either the market value or the agreed value of the car, without them anyway if written off or stolen.
Since the 'tune' has no replacement value to me, it does not worry me.
It's software I can put on another car.

There is a reason why some insurance companies offer unbelievable cheap premiums... Not all are created equal. When you start delving into the fine print, conditions and what it includes, suddenly the more expensive quote starts to offer far better value.

For example, with Virgin, you can pay extra to reduce the excess to $400 for a replacement windscreen but not zero, but with the RACV, their windscreen option is $0 excess.

ljf12 · 13-01-2019, 01:05 AM

Does any insurance company cover modifications if they aren’t “legal” ?

.:4:. · 13-01-2019, 01:11 AM

Quote:

Originally Posted by ljf12

Does any insurance company cover modifications if they aren’t “legal” ?

I think those modifications arent covered. Insurance for something street regoed and street legal means just that. Obviously there are people who dont disclose things on policy applications but if you get found out in the event of an accident appraisal or making a claim then it may become an expensive exercise.

lincolnland · 13-01-2019, 06:48 AM

Tune and injectors aren't really visible mods. I wouldn't worry about it.

cat007 · 13-01-2019, 07:42 AM

Thanks all.
My visible mods will be the intercooler and air box. Injectors, cat and tune are not really that visible?
I'll get on the blower tomorrow and see what's out there.
Thanks again.

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Yaw · 13-01-2019, 07:54 AM

The issue is not the modification/s, its what the policy covers.

Once a car is modified beyond the manufactured specs it can lead to other issues.

eg. put a bigger motor in , a lot of the time the brakes and suspension won't get upgraded also.

So the insurer is not able to make an informed decision on what they are covering.

Then what the policy states can become a big disappointment (fight) for the owner should something happen.

Eg most policies will state that parts will be OEM (original manufacture specs) or aftermarket to the oem specs.

So lets say you have fitted a sports exhaust, when an accident repair comes, you will only be entitled to the original spec parts, meaning one of a few things may happen,

The insurer may void the cover, refund the premium as if the policy never existed stating had they known in the first place, they would never have offered cover (this comes down to your duty of disclosure)

Another option the insurer may take is to just pay what the original spec repairs would be and have you contribute the difference

or just simply make a cash settlement to you which will not be enough to fix the modified damage also.

As you can see and if you put yourself in the place of anyone like this, the customer is not happy and starts bad mouthing the insurer as they feel "ripped off" so a lot of insurers simply will not take the risk on in the first place.

This is why you pay large premiums on modified cars.

A quick example of imported car premiums can be the policy may state if parts are required, they will come by sea.... Meaning if parts are needed from overseas, you will need to wait for a boat to show up with them, they will not pay air freight to get the part sooner, making the customer unhappy with the time frame of the repair due to waiting for parts.

I hope this helps give some clarity to you.

**fordomatic** · 13-01-2019, 08:02 AM

I found that simply having an aftermarket exhaust fitted it excluded over 50% of insurance companies. My old car were all insured through Lumlys, 100 times better service than Shannon’s and they are actually car people, since Shannon’s changed hands they are all about $.

My AU3 XR8 is insured third party with Bingle for $13 a month. Not paying $70 a month to cover a 12k car when that’s what I was paying to cover a $38,000 car.

Long story short, if you don’t declare mods then have a prang and their assessor sees undeclared mods you are screwed, if you hit a lambo you would be in a world of hurrt

cat007 · 13-01-2019, 08:19 AM

Exactly. Having something that deems your insurance invalid, you might has well never had one to begin with.
Hitting a lambo would be bad. As would hitting the thousands of +$100k euros driving around!
I'm currently paying for my FGX XR6T around $1000 per year with a $500 excess and insured value of around $32500.
I'd be ok with a higher excess once modified as I understand that a low excess means high premiums.

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**GO FURTHER** · 13-01-2019, 08:46 AM

Quote:

Originally Posted by cat007

I'd be ok with a higher excess once modified as I understand that a low excess means high premiums.

I went with a slightly higher excess, as that reduced the annual premium significantly.

I went from a $700 excess to $1,000, but saved $250 a year on the premium.

The other thing that reduced my premium was I had now fully paid out my car.
(When a car has a security interest by a third party, i.e. under finance, the premium is generally higher).

My logic is that if I can afford to pay $700 in the rare event the accident is my fault... Then I can afford to pay $300 more.

**fordomatic** · 13-01-2019, 08:47 AM

Quote:

Originally Posted by cat007

Exactly. Having something that deems your insurance invalid, you might has well never had one to begin with.
Hitting a lambo would be bad. As would hitting the thousands of +$100k euros driving around!
I'm currently paying for my FGX XR6T around $1000 per year with a $500 excess and insured value of around $32500.
I'd be ok with a higher excess once modified as I understand that a low excess means high premiums.

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Send Lumleys an email for a quote

ljf12 · 13-01-2019, 11:56 AM

If you have car tuned, different brake package etc and then don’t go through the process to check that it still complies with adr etc it is my understanding that the modifications are not “legal”. From what I have read there is not a lot you can do (especially to a modern vehicle) that doesn’t require checks and approval.

cat007 · 13-01-2019, 12:07 PM

I assume it to be fairly common and there must be a solution. I doubt all these tuned cars have voided their insurance by doing so.

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ljf12 · 13-01-2019, 12:27 PM

Quote:

Originally Posted by cat007

I assume it to be fairly common and there must be a solution. I doubt all these tuned cars have voided their insurance by doing so.

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If the policy mentions coverage for legal modifications, vehicle must be roadworthy in state or territory, I think you may find that the majority of owners of modified cars are potentially not covered.

arronm · 13-01-2019, 12:33 PM

Sweet in WA , we dont have roadworthy...

ratter · 13-01-2019, 01:01 PM

Quote:

Originally Posted by cat007

I assume it to be fairly common and there must be a solution. I doubt all these tuned cars have voided their insurance by doing so.

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technically they are no longer rwc, most insurance companies when saying they will cover mods, normally have something along the lines of legal or rwc mods only

cat007 · 13-01-2019, 01:27 PM

Quote:

Originally Posted by arronm

Sweet in WA , we dont have roadworthy...

Register the car in WA you say.... Haha

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arronm · 13-01-2019, 01:29 PM

One one of my cars has seen the pits in over 30 years..

T3rminator · 13-01-2019, 03:12 PM

AAMI changed their standard policy a few years ago. They will insure the car so long as the modifications does not include aftermarket forced induction (Turbo of SC), and that the modifications are legal.

ratter · 13-01-2019, 03:36 PM

Quote:

Originally Posted by T3rminator

AAMI changed their standard policy a few years ago. They will insure the car so long as the modifications does not include aftermarket forced induction (Turbo of SC), and that the modifications are legal.

That's the key wording right there

jstanovic · 13-01-2019, 04:13 PM

In my experience, if the illegal mods don’t contribute to or cause the accident it shouldn’t make any difference. I had a modified 4wd with illegal sized tyres and big suspension lift, it was written off, as the illegal mods didn’t contribute to the accident I was paid the full insured amount within 2weeks.

BUT if they decide the illegal mods are partly/fully to blame the onus is on you to prove otherwise, especially in a single vehicle accident. Basically your insurance will be worth nothing unless you can afford the time and money to fight an insurance company - good luck!!!!!!

lucas2 · 13-01-2019, 07:51 PM

It would be interesting as to where they draw the line with what is and isn't roadworthy and what they will cover. I'm sure if they looked hard enough on most cars they would find something non-compliant (e.g. a couple of worn bushes or a leaking rear shock). Would that constitute voiding an insurance claim?

I'm sure most owners of modified cars on this forum probably take better care of them than your average 200k km Nissan Pulsar that hasn't been serviced in 3 years.

cat007 · 13-01-2019, 08:08 PM

Quote:

Originally Posted by lucas2

It would be interesting as to where they draw the line with what is and isn't roadworthy and what they will cover. I'm sure if they looked hard enough on most cars they would find something non-compliant (e.g. a couple of worn bushes or a leaking rear shock). Would that constitute voiding an insurance claim?

I'm sure most owners of modified cars on this forum probably take better care of them than your average 200k km Nissan Pulsar that hasn't been serviced in 3 years.

That's something that annoys me. I'm one of those owners. Other than my rear tyres getting a bit low from time to time, I make sure my car is VERY well maintained and any sort of knock, shake, noise or rattle I investigate and repair immediately.

Something 99% of the public here would never do.

I'm a Kiwi and we have 6 monthly road worthys (which we call 'warrant of fitness'). If the car is less than 3 years old its every 12 months I think.

It means you know, for the most part, that the cars on the road have been tested at worst 6 months ago for a road worthy. Blows my mind that this isn't a thing anywhere here in Aussie

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SpoolMan · 13-01-2019, 08:45 PM

FPV, Mustang or any Unique vehicle try Ryno insurance they have many levels of cover, better priced policies than the AAMI, Shannons, Suncorp umbrella of companies.
With Ryno your car must be Garaged, you get lower excess better all round deal.

raised by monkeys · 14-01-2019, 09:42 AM

Just started reading reviews for Shannons and they were poor.
RAA cancelled my insurance policy when I told them i had a forged motor, even though explained it the motor was rebuilt with stronger parts but is factory spec re: all bolt ons. Currently insured with ANZ; which was previously a QBE policy, they didn't tell me it changed to strictly ANZ and the price went up. I called and challenged and said my policy should go down over the years, after only claiming for someone reversing into me, and they said with the changes to ABZ the cost went up and had to lose extras to get the same cost. Currently paying $90 p/m to drive back and forward to work/golf course/gym.

raised by monkeys · 14-01-2019, 09:56 AM

Giving iSelect comparison a go

raised by monkeys · 14-01-2019, 10:40 AM

iSelect called me and said insuring modified is hard (duh) but try shannons, RACV, allianze and AAMI

Vesper Martini · 14-01-2019, 11:07 AM

Question:
Doesn't the insurer have to prove that the defect or modification has contributed to the accident?

ie if you run into the back of someone and have bald tyres they can refuse based on your car being unroadworthy.

If you have been hit from behind and happen to have unroadworthy tyres they cannot refuse you claim.

I would argue if you car was stolen they cannot refuse a claim based on minor mods, but only have to pay up based on the standard vehicle.

https://insurancelaw.org.au/factshee...sed-factsheet/

asagaai · 14-01-2019, 11:09 AM

Quote:

Originally Posted by jstanovic

In my experience, if the illegal mods don’t contribute to or cause the accident it shouldn’t make any difference. I had a modified 4wd with illegal sized tyres and big suspension lift, it was written off, as the illegal mods didn’t contribute to the accident I was paid the full insured amount within 2weeks.

BUT if they decide the illegal mods are partly/fully to blame the onus is on you to prove otherwise, especially in a single vehicle accident. Basically your insurance will be worth nothing unless you can afford the time and money to fight an insurance company - good luck!!!!!!

What needs to be focused on is an insurance policy is a contract between you (insured) and the Insurance company (insurer).

You have a duty of disclosure when entering into the contract to disclose all mods. If you do not and your car is totalled and you wipe out a Ferrari, and you have mods you did not disclose:

1. To deny your claim, the Insurer will need to prove that had you disclosed the mods they would not have entered into the contract to insure you. If the Insurer can prove they would not have insured you had you disclosed the mods, they will deny indemnity and you are on your own.

2. Oftentimes, the Insurer would have insured you had you disclosed the mods but charged a higher premium, in that situation the Insurer is obliged to indemnify you less the extra premium they would have charged you.

Separate from disclosure of matters at the Contract formulation stage (and there is an ongoing obligation to continue to disclose mods during the contract period) you need to look at the Policy terms.

Often there is a clause to the effect that says that you are obliged to keep the vehicle in a roadworthy state, and it will be here where if you let your rear tyres wear flat etc and in the wet wiped out your car and a Ferrari, and for instance the police COPS reports say that the worn unroadworthy rear tyres materially caused the accident, they will likely refuse insurance.

So there is a difference between disclosures required for policy formulation (where causation is not relevant) and conditions imposed in the policy for other obligations for instance roadworthy requirements (where causation likely would be required).

Anyway bored on holiday and sick of bushwalking-hence this blurb....