Custom Built Car Insurance

When you phone your motor insurance company to insure your car you tell them you drive a standard 1.8 Mitsubishi Lancer. True enough. However, what you have failed to tell them is that you have made one or two minor modifications to your car so that it now has alloy wheels, a spoiler and flashy strips down the side. Later you need to make a claim on your motor insurance and the car insurance company sends an insurance adjuster around to see your car. Guess what? In all likelihood the insurance adjuster is going to inform your car insurance company to invalidate your policy. The reason – you have a custom built car!

What constitutes a ‘custom’ built car?

Unfortunately there are no clear motor industry specifications as to what constitutes a custom built car – thus, each motorcar insurance company differs in its interpretation of what a custom built car is. That said, it is generally understood that any modification you make to your car after you have bought it could result in the car being reclassified as being a custom built car.

Will my car insurance premium be higher?

While it does not necessarily have to be the case, it is highly likely that the insurance premium for your custom built car is going to be higher than it would have otherwise been had you not made the changes. The reason why this is so is two-fold:

1. ordinarily car insurance companies view custom built cars as being more ‘sporty’; and
2. insurance companies view people with custom built cars as being ‘car enthusiast’; which, rather oddly, rather than being viewed as someone who knows a little about cars and the risks involved, results in you as being classified as a ‘riskier’ driver than your usual 12,000 miles a-year driver.

Things to be aware of

If you are considering making some modifications to your car, which will result in the car being viewed as being a custom built car, then keep in mind that:

• if you do not have custom built car insurance, but have normal car insurance, you most probably just invalidated your car insurance policy
• the insurance value of your car is what the appraised value was on the day you took out the car insurance. So, if you make modifications after this date, which increases the value of your car, you’ll likely not be able to claim for, or be reimbursed for, these modifications
• in the case of a total loss or theft, you’ll only be reimbursed the book-value of the car, which will not take into consideration any changes you made to the car. Therefore, if you can, try and talk with your car insurance provider to discuss a Guaranteed Appraised Valuation of the car and thereby avoid any disappointment if your beautiful custom built car is written-off or stolen

So, the next time you are thinking of putting alloy wheels, a spoiler or doing a sport paint job to your car, you may want to talk this through with your car insurance company and see if even these small modifications are going to have any effect on the classification of your car insurance policy and the premiums you have to pay. If in any doubt, read your insurance policy carefully.