Car insurance premiums are on the rise. Insurers paid out a record £11.7 billion in car insurance claims in 2024. For every £1 earned in premiums in 2026, UK motor insurers are forecast to pay out £1.07 in claims and expenses. The average UK car insurance premium was £551 in Q3 2025, and premiums are expected to rise around 5% in 2026. This means keeping your policy updated, especially after modifying your vehicle, is more important than ever. Failing to inform your insurer about changes can lead to invalidated cover.
Understanding Vehicle Risk Rating (VRR)
The way cars are categorised for insurance is changing. The old 1-50 insurance group system is being replaced by Vehicle Risk Rating (VRR). Cars registered after August 2024 are assessed under VRR. This system scores vehicles from 1 to 99 across five key areas. These include performance, how easily they can be damaged, how simple they are to repair, their safety features, and their security measures. This new system aims to provide a more detailed picture of a vehicle’s risk profile to insurers.
If I were modifying my car, my first move would be to check how those changes might impact its VRR score. This is because even small modifications could shift how the vehicle is perceived by insurers, potentially affecting my premium.
Why Modifications Affect Your Insurance
When you modify your car, you’re essentially changing its characteristics. This can have a direct impact on the risk it presents to an insurer. For instance, adding a performance exhaust or a spoiler might make the car more attractive to thieves or increase its top speed. Both of these factors can lead to a higher risk of a claim. Even seemingly minor cosmetic changes can sometimes influence how an insurer assesses your vehicle’s value or its susceptibility to damage. This is why it’s crucial to be upfront about any alterations.
Repair costs are a significant factor in insurance payouts. Research shows that repair costs account for 64% of claims payouts. If your modifications make repairs more complex or expensive, your premium will likely increase. For example, electric vehicles (EVs) are already 25% more expensive to repair than petrol cars. This is often due to the high cost of battery replacement, which can sometimes cost £10,000 or more. If you add custom body kits or specialised parts to an EV, these repair costs could escalate further.
One thing I’d check first is the potential impact of a modification on repairability. If a change makes a common repair much more difficult or requires specialist parts, that’s a red flag for insurers and will likely mean a higher premium. It’s about understanding the practical implications for the insurer.
Common Pitfalls When Modifying Your Vehicle
Not Declaring Modifications
The most common mistake drivers make is failing to declare modifications to their insurer. This is a serious oversight. When you take out a policy, you agree to provide accurate information. Failing to mention changes means your policy details are inaccurate. If you then need to make a claim, your insurer may refuse to pay out. They might even cancel your policy altogether. This leaves you uninsured and potentially liable for the full cost of any incident.
If I found myself in this situation, I would immediately contact my insurer to declare the modification. It’s better to face a potential premium increase than to have no cover at all.
Assuming Minor Changes Are Insignificant
Some drivers believe that small changes, like a new stereo system or upgraded alloy wheels, won’t affect their insurance. However, insurers often have specific guidelines for what constitutes a modification. Even an upgraded sound system could increase the risk of theft. Similarly, alloy wheels might be more expensive to repair or replace if damaged. It’s always best to err on the side of caution and declare everything.
Overlooking Performance Enhancements
Modifications that boost engine power, such as a new turbocharger or a remapped engine control unit (ECU), are particularly likely to increase premiums. These changes can significantly alter a car’s performance and its potential to be involved in high-speed accidents. Insurers view these as high-risk alterations. They often require specialist underwriting and can lead to substantial premium hikes.
In this scenario, I’d want to compare quotes from insurers who specialise in modified vehicles. Standard insurers might not offer competitive rates for cars with significant performance upgrades.
The table below highlights how different types of modifications can impact insurance premiums.
→ Scroll right to see all columns
| Modification Type | Potential Premium Impact | Reason |
|---|---|---|
| Cosmetic (e.g., body kit) | Moderate Increase | Can affect repair costs and vehicle attractiveness |
| Performance (e.g., engine tuning) | Significant Increase | Increases risk of accidents and theft |
| Technology (e.g., advanced stereo) | Slight to Moderate Increase | Increases risk of theft |
| Safety (e.g., upgraded brakes) | Slight Decrease or No Change | Can reduce accident risk |
Making the Right Choices for Your Modified Car
Declare All Modifications Honestly
The most crucial step is transparency. When you get a quote or renew your policy, be completely honest about every single modification you’ve made. This includes anything from a subtle engine remap to a new spoiler. Insurers have databases and can sometimes detect undeclared modifications. If they find out after an incident, your claim could be rejected. This is a fundamental aspect of responsible car ownership.
My first action would be to gather a list of all modifications and their installation dates. This ensures I have all the necessary details to provide to my insurer accurately.
Research Insurers Specialising in Modified Cars
Not all insurers are equipped to handle modified vehicles. Some policies are designed specifically for cars with performance enhancements or customisations. These specialist insurers understand the risks involved and can offer more appropriate cover. They may also have a better understanding of the value of your modifications. Researching these providers can save you money and ensure you have adequate protection.
Using a comparison site is a good starting point, but don’t stop there. Look for insurers that explicitly mention cover for modified vehicles on their websites.
Consider Telematics for Young Drivers
For younger drivers, modifications can significantly increase insurance costs. Telematics, or “black box” insurance, can be a valuable tool. These policies monitor your driving behaviour, such as speed, acceleration, and braking. Research shows that 81% of UK drivers now know about telematics. For young drivers, telematics policies can offer savings over £1,000. By demonstrating safe driving, you can prove you are a lower risk, even with modifications.
If I were a young driver with a modified car, I would definitely explore telematics options. The potential savings are substantial, and it encourages safer driving habits.
Installing a dash cam can also be a wise investment. It records your journeys and can provide crucial evidence in case of an accident, potentially helping to prove your case and avoid claims disputes. The Garmin Dash Cam X310 offers 4K recording and GPS, while the more compact Garmin Dash Cam Mini provides essential incident recording.
Understand the Impact of EV Modifications
Modifying electric vehicles presents unique challenges. As mentioned, EVs are already more expensive to repair. Adding customisations can exacerbate this. For example, altering the suspension or bodywork on an EV might interfere with battery cooling systems or aerodynamic efficiency. Insurers will carefully assess these changes. It’s vital to ensure any modifications are compatible with the vehicle’s electric powertrain and don’t compromise its safety or performance characteristics.
Frequently Asked Questions
Will adding a spoiler increase my car insurance? ▾
What if I change my car’s colour? ▾
Can I get insurance for a car with a modified engine? ▾
What happens if I don’t declare modifications? ▾
Are there any modifications that lower insurance costs? ▾
Keeping your car insurance up-to-date with any modifications is essential for valid cover. Always be transparent with your insurer about changes you make to your vehicle. This ensures you are protected should the unexpected happen.
If this was useful, you might also want to read The Most Common Car Insurance Mistakes UK Drivers Make and How to Avoid Them.
Sources and Further Reading
10 Things You Need to Know About Car Insurance for 2026 — This article provides a comprehensive overview of upcoming changes and trends in the UK car insurance market.
UK Driving Law Changes 2026 — This resource details various legal and regulatory shifts impacting drivers in the UK, including those related to vehicle technology and safety.
What to Expect from Car Insurance in 2026 — This guide offers insights into the projected state of car insurance premiums and market dynamics for the coming year.
carblog.co.uk, 2026.
utterlycovered.com, 2026.
brumble.co.uk, 2026.
