If you’ve changed anything on your car from how it left the factory — different wheels, a suspension drop, a wrap, an engine upgrade — your insurance policy probably doesn’t treat it the way you’d assume. The rule across New Zealand insurers is consistent in one direction: if they don’t know about the change and haven’t agreed to it, you may not be covered when you need to claim. Here’s what you actually need to know.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The Insurance Council of New Zealand puts it plainly: you need to disclose everything that may affect whether an insurer accepts you, whether or not a question is asked. Consumer Protection says the same — tell your insurer about modifications. And Tower’s comprehensive wording makes the consequence explicit: an unlisted modification can leave the whole car uncovered, not just the part. The ICNZ motor insurance guide covers the disclosure obligations in more detail.
What counts as a modification
Tower’s policy wording defines modifications as changes, alterations, or customisations to your car from the manufacturer’s standard specifications. The list is “including but not limited to,” so an item missing from it is a question for the insurer, not a safe assumption. That covers engine, steering, suspension, wheels and tyres, paint effects and wraps, roll cages, racing harnesses, steering wheel changes, external wastegates, carbon fibre panels, and door changes. Aftermarket alarms or immobilisers are typically included without a separate listing, but bolt-on extras the factory didn’t fit are treated as accessories and covered only under the optional modifications benefit.
What happens when you don’t declare
The consequence of non-disclosure goes beyond a declined claim. Under Tower’s wording, if you break your responsibilities, the insurer can decline the claim, recover any payment already made, cancel the policy, or avoid it entirely — treating it as if it had never been taken out from the date of the incorrect statement. The ICNZ notes that a breach can lead to refusal of part or all of a claim, or to the policy being treated as never having existed. A published case from the Financial Services Complaints Limited illustrates the principle: incomplete disclosure of a car’s condition resulted in a declined claim and cancellation of cover.
This applies across cover levels. Tower’s third party, fire and theft wording carries the same exclusion and the same optional benefit. Their third party only wording says the car is not covered unless Tower has agreed to the modification and noted it on the certificate. The message is consistent: disclosure isn’t optional, and the consequences don’t depend on which level of cover you hold.
How NZ insurers compare on modifications
Not every insurer handles modifications the same way. Some require you to declare every change, others only certain types, and a few exclude modified cars entirely. The table below shows how five major insurers approach it based on their current policy wordings.
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| Insurer | Disclosure requirement | Cover for modifications | Key detail |
|---|---|---|---|
| Tower | Must declare all changes from manufacturer spec | Optional benefit, $2k–$5k cap | Unlisted mods void cover for the whole car |
| AMI | Certain mods only; wheels don’t need declaring | Cover voided for undeclared listed mods | Aftermarket wheels specifically excluded from disclosure |
| Cove | Must declare all modifications | No cover if car has been modified | Performance mods like turbochargers and ECU upgrades excluded |
| NZI | Must declare 13 specific modification types | Cover voided for undeclared listed mods | Includes nitrous, turbo, ECU, suspension, brakes requiring LVV cert |
| Initio | Must declare all modifications | No cover unless agreed in writing | Specialist insurer for modified vehicles |
If you’re shopping for cover, the safest approach is to read the insurer’s current wording and schedule rather than applying another insurer’s rule. What AMI accepts without disclosure might get a claim declined under NZI. Ask in writing whether each specific change must be disclosed and whether it’s covered, and save the response with your policy documents.
Common mistakes and how to avoid them
Assuming minor changes don’t count
Wheels, a vinyl wrap, or a steering wheel swap might feel cosmetic, but Tower’s wording explicitly names them as modifications. The same goes for aftermarket alloy wheels — while AMI doesn’t require disclosure for mags, other insurers do. The mistake is treating a change as too small to matter when the policy definition doesn’t have a size threshold. If it’s not factory standard, declare it.
Thinking all insurers work the same
Cove’s wording says your car is not covered if it has been modified — full stop. AMI’s wording says aftermarket wheels don’t need to be disclosed. NZI lists 13 specific modification types that void cover if undeclared. These aren’t minor differences; they’re fundamentally different approaches to the same question. Relying on what a friend’s insurer allowed, or on a previous policy with a different company, is a gamble. Check the wording of the policy you’re actually buying.
Forgetting to update the insurer after new mods
Modifications made after the policy starts must be declared immediately. Tower’s wording requires you to tell them as soon as anyone modifies the car from the manufacturer’s specification. The same list of immediate notifications includes a new regular driver and starting to use the car for business such as delivering food or packages. Set a reminder to check your policy schedule whenever you add or remove a part.
Frequently asked questions
Do I have to tell my insurer about every modification? ▾
What happens if I don’t declare a modification? ▾
Are wheels and wraps classed as modifications? ▾
Can I insure a modified car with third party cover only? ▾
Does agreed value help with a modified car? ▾
Do I need LVV certification for insurance? ▾
The practical takeaway
The Contracts of Insurance Act 2024 hasn’t fully commenced yet, so current policy wordings and the ICNZ’s disclosure guidance are what govern your cover today. The honest route to a lower premium is a higher excess or a lower cover level, not leaving a modification off the form. Before you fit anything — or as soon as you discover changes on a used car — check the insurer’s current wording, disclose in writing, and keep the confirmation. It’s the difference between a claim that pays out and a policy that never existed.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Comprehensive vs third party: which car insurance is right for you in NZ.
Sources and Further Reading
The ultimate guide to lowering your car insurance excess in New Zealand — Practical steps for adjusting your excess across different cover levels.
Consumer Protection NZ. Car insurance. 🔗
Insurance Council of New Zealand. Things you need to tell your insurer. 🔗
Tower Insurance. Comprehensive car insurance wording (September 2024). 🔗
Tower Insurance. Third party, fire and theft wording (September 2024). 🔗
Tower Insurance. Third party only wording (September 2024). 🔗
NZ Transport Agency Waka Kotahi. Modifying your vehicle. 🔗
AMI Insurance. Car insurance policy wording AMI0052/11 (November 2024). 🔗
