You may not even realize that you may affect your car insurance premiums when you modify your vehicle.
Do new paint, an upgraded sound system, and window tinting increase insurance premiums? Is it normal for car insurance to increase each year? We’ll explain how specific modifications can make your insurance rates higher, but we’ll also cover how your driving habits affect your insurance even more.
Vehicle Modifications and Insurance
Most insurance policies include a generic clause that covers vehicle modification up to a limit of usually $500 or $1,000. So, minor modifications may not impact your insurance premiums. Let’s look at some specific ways you can change your vehicle.
Tinted windows shouldn’t increase your insurance rates because they don’t increase the financial risk to your insurer. Their expense doesn’t exceed the threshold.
If, however, your windows are tinted darker than is legal in your state, your insurance company won’t cover tinting them again if your windows are damaged.
If you invested in a system and want to make sure it’s covered in the event of theft or damage, you’ll need to disclose that information to your insurer. If the stereo increases the value of your vehicle, you may pay more for it, but in most cases, it won’t make a difference.
Your paint color doesn’t affect your insurance rates. However, if you go with a premium, costly paint job, you need to let your insurance company know. If the new paint increases their financial risk, you’ll have to pay higher car insurance premiums if you have full coverage.
If your new paint is equivalent in value to what was on your vehicle already, it shouldn’t make a difference in your car insurance costs.
Lifted or Lowered Suspension
These two modifications impact your vehicle’s risk of being stolen and being in an accident, so if you have a lifted or lowered vehicle, your insurance company will almost always charge you higher premiums to reflect that increased risk.
Modifying your vehicle to make it accessible for disabilities can cost a lot of money. If you have a significant amount of money invested in these changes, you will need to make sure the modifications are covered by insurance. Your premiums will be higher to reflect the increased value of your vehicle.
Driving Habits and Insurance
While modifications may not even affect your insurance depending on how major or minor they are, your driving history will certainly affect your premiums.
Good Driving History
You’ll pay the lowest rates if you have no accidents or claims on your record. In addition to paying rates that reflect your low risk, you can often get a discount to reward you for being a good driver.
Insurance companies base your premiums on your risk. So if statistics can link your driving history to an increased risk of you filing a future claim, they can charge you higher rates. For example, if you have gotten a couple of speeding tickets, you probably tend to speed occasionally or frequently, which is linked to a higher risk of being involved in an accident.
A DUI conviction is one of the worst driving offenses. Not only does driving under the influence put your life and others’ lives at risk, but it also makes your car insurance quotes skyrocket. In addition, if you have more than one DUI conviction, you might not even be able to find an insurance policy on the competitive market.
Not Paying Your Bills
We’re not just talking about falling behind on your car insurance bills. Not paying insurance premiums will get your coverage canceled, but missing other payments affects your insurance premiums as well.
Your credit score is a major factor in your insurance rates. A few states ban insurers from considering credit scores when formulating premiums, but it’s common practice in most places. Of course, not everything money-related affects your credit score, but if you don’t pay your bills, your credit score will fall, and your insurance premiums will rise.
If you have an accident on your record, it will probably affect your car insurance rates for three years.
Your insurance company doesn’t really know how you drive every day unless you let them. If you agree to a telematics device as an app on your phone or plugged directly into your car, your insurance company can base your rates on measurements of your driving, like how hard your brake and how quickly you accelerate.
With telematics, you might end up paying more or less, depending on how you drive.
Save Money on Insurance
If you have a combination of any of the factors that raise your insurance premiums, you can expect to see even higher rates. Even if you have a clear driving history, though, you might be paying more than you need for car insurance.
Here are some of the easiest ways you can get lower insurance rates so you can work a little wiggle room into your budget:
- Compare quotes – Some insurance companies are a better fit for your situation, and comparing quotes can show you how much you could save by switching providers.
- Look for discounts – You could save a lot of money by applying the eligible discounts to your policy.
- Take a class – In some situations, taking a defensive driving class could help you reduce your premiums, especially if you’ve had an accident or traffic violation.
You have a lot of control over your insurance rates because what you pay is based on your actions. Changing your car may make a small impact on your premiums, but your driving habit will have a significant effect.
Being a good driver will help you get the best rates possible, so be careful every time you get behind the wheel, follow the laws, and watch out for people who don’t.
Melanie Musson writes and researches for the auto insurance comparison site, AutoInsurance.org. She enjoys sharing her knowledge of insurance with others so they can save money and protect their finances.
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