A set of aftermarket wheels, a lift kit, a tune, a bull bar, a tow bar, a roof rack, a subwoofer, a wrap. Australians modify their cars constantly, and most of it is ordinary. The insurance question is not whether modifications are allowed — it is whether your insurer knows about them, whether the policy covers them, and whether they change how a claim is assessed.
This guide explains what insurers commonly treat as a modification, why it matters, and what to check. It does not tell you that every modification voids cover, because that is not true, and it does not tell you that every insurer treats modifications the same way, because they do not. It sits under our car insurance hub.
What counts as a modification
In insurance terms, a modification is generally any change to the vehicle from the manufacturer’s standard specification. That definition is broader than most people expect. Insurers commonly group modifications into categories like these:
| Category | Typical examples | Why an insurer may care |
|---|---|---|
| Performance | Engine tune or remap, turbo or supercharger, exhaust, intake, upgraded brakes | Changes how the car performs and, in some cases, its risk profile and value |
| Suspension and ride height | Lift kits, lowering, coilovers, airbags | Can affect handling and may have roadworthiness or engineering requirements |
| Wheels and tyres | Aftermarket rims, non-standard tyre sizes | Affects value to replace and, at some sizes, legality |
| Body and exterior | Body kits, spoilers, wraps, custom paint, tinting | Changes replacement cost and, sometimes, the agreed or market value |
| Accessories and 4WD equipment | Bull bars, tow bars, roof racks, winches, driving lights, canopies, drawers | Often high-value items that are only covered if listed |
| Audio and electronics | Head units, amplifiers, subwoofers, dash cams | Theft-attractive; may need to be itemised to be covered |
| Safety and accessibility | Hand controls, hoists, dual controls | Usually treated differently from performance modifications, but still typically need to be noted |
The point of the table is not that every item on it is a problem. It is that most of them are things an insurer will want to know about, and several are things that will only be covered if they are listed on the policy.
Why modifications matter to an insurer
Three separate reasons, and it helps to keep them apart:
- Risk. Some modifications change how likely the car is to be in an accident, stolen or damaged. Performance and suspension changes are the obvious examples.
- Value. Modifications change what the car costs to repair or replace. If the insurer does not know about them, they may not be reflected in the sum insured or in how a total-loss claim is settled.
- Legality. Some modifications require engineering certification or are not road-legal in a given state. Driving a vehicle that is not roadworthy can affect a claim regardless of what the policy says about modifications.
Insurers respond to these in different ways. Some accept a wide range of modifications on a standard policy provided they are declared. Some price them. Some exclude particular categories. Some write specialist products for heavily modified or performance vehicles. The only reliable way to know how yours responds is to read the policy and ask.
What you are actually required to tell the insurer
This is where accuracy matters, because the actual rule is narrower than the way it is often described.
For consumer insurance in Australia, when you take out or renew a policy you have a duty to take reasonable care not to make a misrepresentation to the insurer. In practice, that means the questions the insurer asks you — including questions about modifications — need to be answered accurately and honestly. If you are asked whether the vehicle has been modified and you say no when it has, that is a misrepresentation. If you are not asked a question, the duty is about how you answer the questions you are asked, not about volunteering everything you can think of.
Separately from that duty, your policy may have its own term requiring you to notify the insurer if the vehicle is modified during the period of cover, or if circumstances change. That is a contractual condition of the policy rather than a general legal duty, and it varies between insurers and policies. Some policies ask you to tell them before a modification is made; some ask at renewal; some list modifications that must be notified and ones that need not be.
So the practical position has four parts:
- Check the policy and the Product Disclosure Statement for how modifications are defined and treated.
- Answer the insurer’s questions accurately, at application and at renewal.
- Tell the insurer about modifications where the policy requires it, and preferably before the work is done.
- Get confirmation of cover — in writing — so there is no argument later about what was disclosed.
How modifications can affect a claim
Because insurers differ, the honest answer is “it depends on the policy”. The outcomes that can arise include:
- The modification is covered. It was declared, it is listed, and the sum insured reflects it. Damage to the modified part is claimable in the ordinary way.
- The vehicle is covered but the modification is not. Some policies cover the base vehicle but exclude, or cap, undeclared or unlisted accessories and modifications.
- The claim is reduced or adjusted. Where an undeclared modification is found and the insurer would have charged more had it known, the claim may be settled on a different basis.
- The claim is declined. Generally the more serious outcomes are associated with modifications that are relevant to the loss, were misrepresented, or made the vehicle unroadworthy.
None of these is automatic. Which one applies depends on the policy wording, what was asked and answered, and the connection between the modification and the claim. That is exactly why declaring modifications up front is the cheap option: it moves you from the bottom of that list to the top.
Agreed value, market value and modified cars
Modified cars are the classic case for thinking about how the vehicle is valued. Under a market-value policy, the payout on a total loss is what the insurer assesses the car to be worth at the time, and modifications may or may not be reflected. Under an agreed-value policy, the amount is set when the policy starts, and declared modifications can be built into that figure. Our guide to agreed value versus market value explains the trade-offs. Whether agreed value is available on a modified vehicle is, again, insurer-specific.
Roadworthiness and engineering
Some modifications are only legal with engineering certification, and the rules differ by state. Ride-height changes beyond a set limit, significant engine swaps, wheel and tyre sizes outside the permitted range, and some body changes commonly fall into this category. An insurer may ask for evidence that a certifiable modification has been certified. Even where the policy covers modifications generally, a vehicle that is not roadworthy at the time of an accident can affect a claim. Our roadworthy certificate guide covers the Queensland position.
Buying a car that has already been modified
If you are buying a used car with modifications, the insurance question arrives before you own it. Ask the seller for any engineering certificates and receipts, check the modifications are legal in your state, and get an insurance quote before you commit — a heavily modified vehicle may be harder or more expensive to insure than the price suggests. A car history check will not tell you about modifications, but it will tell you about finance owing and write-off history, which are the other pre-purchase questions. Our guide to inspecting a used car covers what to look for on the car itself.
A practical checklist
- List every change from standard on your vehicle, including accessories you think of as “just fitted”.
- Read how your policy defines and treats modifications.
- Declare them when applying and at renewal, and answer the insurer’s questions accurately.
- Notify the insurer before making new modifications where the policy requires it.
- Keep receipts and any engineering certificates.
- Consider whether an agreed-value policy suits the vehicle.
- Get written confirmation of what is covered.
Frequently asked questions
Does modifying my car automatically void my insurance?
No. Modifications are common and many are accepted by insurers when declared. Problems generally arise when modifications are misrepresented, relevant to the loss, or make the vehicle unroadworthy. How any particular modification is treated depends on the policy wording and the insurer.
Do I have to tell my insurer about every modification?
You must answer the insurer’s questions accurately, which will usually include questions about modifications, and your policy may separately require you to notify the insurer of changes. What has to be notified, and when, varies between policies — read yours, and when in doubt, tell them.
Will modifications increase my premium?
They can, depending on the insurer and the type of modification. Performance and suspension changes are more likely to affect pricing than cosmetic or accessory items, but there is no universal rule. Some insurers do not price common accessories at all; others price or exclude particular categories.
Are accessories like bull bars and roof racks modifications?
Many insurers treat fitted accessories as modifications or as items that need to be listed to be covered. Because they are often high-value and easy to remove, it is worth declaring them specifically rather than assuming they are included.
What about modifications that were on the car when I bought it?
They are still modifications from the insurer’s point of view. Declare them, ask the seller for any certificates, and check that they are legal in your state before you rely on cover.
Is there specialist insurance for heavily modified cars?
Some insurers write products aimed at performance or modified vehicles, often with agreed value and a wider approach to modifications. Whether one suits you depends on the vehicle and the cover you need — compare the policy terms, not just the label.
Written and reviewed by the team at Car Buyers Assist
This article is general information only and does not take into account your objectives, financial situation or needs. It is not advice about any particular insurance product. Car Buyers Assist helps customers find cover through its partners and does not assess every product available in the market. Cover, exclusions, limits and conditions vary between insurers and between policies — always read the relevant Product Disclosure Statement and Target Market Determination, and confirm your own position with your insurer before relying on cover. Vehicle modification and roadworthiness rules vary by state.