8 Car Modifications You Should Inform Your Insurer

India’s supreme court, in its January 2019 judgment, reversed a Kerala high court judgment that allowed car and bike owners to make vehicle modifications in agreement with the Kerala Motor Vehicle Rules, 1989. The order has far-reaching consequences for car owners and their insurers. Below is an overview of the said supreme court judgment and the types of vehicle modifications it allows and disallows, as well as the related impact on the insurance premium and lists eight types of car modifications you should inform your insurer about.

What the supreme court judgment says

This judgment, which modified section 52 of the Motor Vehicles Act, 1988, orders that no motor vehicle can be allowed to alter its original specifications. These are clearly mentioned at the time of the vehicle’s registration and they cannot be amended. The main objectives of the order are to maintain the safety and convenience of road transport, reduce accidents, and control vehicular pollution.

Alterations that are allowed

The supreme court judgment is not a blanket ban on vehicle modifications. There are exemptions to sections 52 which allow certain modifications that don’t affect the specifications mentioned in the vehicle’s registration papers. These are as below:

Change of vehicle colour

Added accessories like door protectors, markers, stickers or labels, rain guards, music system, etc.

Type or category of tyres?

• Vehicle engine, with prior information and permission from the local RTO. This is allowed keeping in mind fuel conversion facility and resultant fuel efficiency and pollution control.
• Fuel conversion kits that enhance performance or reduce pollution.

How do car alterations affect insurance premiums?

Car insurance premiums are calculated basis various factors like the make, model, specifications, mileage, market price, vehicle condition, accessories, etc. When a modification is made to any insured car, it changes the parameters of the premium calculation.

For example, a car has already done 70,000 kilometres on the road and it is sold. Now, the premium calculation for insurance of this car will be different from the one applicable to a new car of the same make, model, and specifications. This is particularly true of major changes such as changes made to enhance engine performance or boost mileage. A car that is fitted with a dual exhaust system to increase its off-take will also be at a greater risk of accidents. Hence, its insurers will hike its premium. Similarly, a car with a dual fuel supply system will attract more premium. On the other hand, cars with more safety features and advanced technological features that reduce the risk of accidents will have lower premiums.

This table shows the premium calculations for various types of car alterations.

Which are the car modifications you should intimate your insurer about?

These are the changes that should be intimated to the insurer:

1. Body alteration: This is often done to increase the aesthetic appeal and make the car look more macho, or due to some practical reason like increasing its load-bearing capacity. Body alteration made due to whichever reason will perhaps change the purpose of the vehicle, so it must be informed to the insurer.

2. Changes to the engine: The engine is the heart of the car. Any alteration made to it will affect the power and speed.

3. Braking and suspension systems: These two are vital features related to a car’s safety. Changes to these systems must be informed to the insurer.

4. Interiors: These too are taken into consideration while calculating a car insurance premium. You may install and expensive music systems and advanced front-rear air-conditioning in the interiors which may affect the premium calculation. Apart from this, steering wheels, dashboard, upholstery, and other features are also considered in the insurance premium.

5. Wheel change: An upgrade will make your car look swankier and increase its value, which will increase the premium too.

6. Car painting: Designer paintwork or painting with special-purpose paints will also have a bearing on the car’s premium.

7. Alterations made for disabled users: Many car alteration designers now focus on making the car disabled-friendly, both for the driver and passengers. Swivel seats, automatic transmission, and power steering are some changes that are commonly made to make the car disabled-friendly. These changes must be informed to the insurer too.

8. Alterations made for sports or adventure purpose: Cars are often modified for races, moto-cross contests, cross-country expeditions, wildlife trips, etc. these changes should also be informed to the insurer.

If you make alterations to your car #ThinkAhead and inform your insurer so that you can rest assured that every part of your precious vehicle is properly protected.