Modified car insurance: Premiums and claims can be affected

Kuala Lumpur, September 29 — Vehicle modifications have once again come under scrutiny following the seizure of 37 cars with extreme alterations during Ops Ekstrem in the city. The operation also uncovered 57 cases of uninsured vehicles. Cosmetic upgrades like sport rims, lowered suspension, body kits and performance enhancements can impact not only a car's appearance and handling but also its insurance premiums, coverage and claims.

The value, performance and risk of a modified vehicle can change, affecting insurance. Modified car insurance covers vehicles altered from their original specs. Changes to engines, turbochargers, suspension, performance components or high-end wheels may increase a vehicle's worth or repair expenses. Vehicle owners must inform their insurer of modifications, as advised by the General Insurance Association of Malaysia (PIAM).

Uncovered modifications could lead to higher premiums or denial of coverage. Disclosure also influences claims. If an accident occurs due to an undisclosed modification, the insurer may refuse liability under the policy. Not all modifications have the same impact on insurance. Cosmetic changes may be treated differently than engine or performance upgrades.

Aftermarket parts such as custom rims, body kits or performance components can be pricier to replace after an accident, with coverage governed by policy terms, limits and exclusions. Before renewing car insurance, motorists should review their coverage and compare premiums, sum insured and available benefits, especially if the vehicle has been modified since the last policy.

BJAK CEO Ronald Lim emphasized that a modification may seem like a minor upgrade to the owner but can alter the vehicle's value, repair cost and risk from an insurance standpoint. Motorists should comprehend how a modification affects their coverage before an accident occurs, not when they file a claim. Terms for modified vehicles may vary depending on the provider and policy.

BJAK advises motorists to disclose relevant modifications, verify if aftermarket components are sufficiently covered and compare insurance options before renewing their policy.