Modified Car Insurance Explained

Put simply, a modified car is a vehicle that has been altered from the original manufacturer’s specifications. This could be done via replacing, adding or upgrading components of the car, therefore altering its appearance, handling or performance.

While modifying your car may not automatically void your existing car insurance policy, it could still cause some trouble. That’s why if you’re looking to modify your car, you are better off looking for a car insurance policy specific to modified cars.

These types of policies are offered by fewer insurers, and will depend on the legality of the modifications in your state.

Modified car insurance policies are also usually more expensive than a standard car insurance policy, largely due to the heightened risk of theft or accidents if the car has been significantly altered.

An insurance claim may be denied if your car has illegal modifications, or if your car insurer is not aware of the modifications you’ve made. What is considered legal and illegal when modifying a vehicle will depend on your state and territory, and which modifications are approved under your policy will depend on your insurer.

Additionally, in some states, modified cars will not be insured to those on provisional licences whatsoever: in New South Wales, Queensland, South Australia and Victoria, p-platers are banned from driving certain cars such as those modified for high-speed or sports racing.

Related: How To Check For Car Insurance In Australia

As stated, modified car insurance policies are usually more expensive than your standard car insurance policy. This is because of the heightened risk of theft or accidents, and because the cost of repair or replacement would also likely be higher.

Therefore, most car insurance providers that offer modified car insurance will likely charge a higher premium or a higher excess.

However, if your car modification is required due to mobility issues or living with a disability, your state or territory’s transport authority may help you cover the cost of necessary car modifications and subsequent insurance costs.

It’s important to note that not all car insurance providers will insure modified cars. This means if you already have an existing car insurance policy, and then you perform modifications to your vehicle, you may have to search for a new car insurance provider if your current provider does not accept the modifications within their policies.

As always, this is why it is paramount to carefully read the product disclosure statement of an insurance policy before taking one out. If you anticipate that you will be making modifications to your car upon buying it, even a year or so down the track, it may be more convenient to ensure you’re with a car insurance provider that you know will already continue to cover your modifications.

A (non-exhaustive) list of common car modifications include:

• Adding bullbars
• Alloy wheels
• Brake upgrades
• Custom paint jobs
• Exhaust systems
• Extended/additional mirrors
• Fuel changes
• Hand controls
• Left-foot accelerator
• Pedal changes
• Racing harnesses
• Spoilers
• Steering aids
• Sunroofs
• Suspension changes
• Turbo charges
• Wheelchair accessibility changes
• Wider tyres
• Window tinting

Each state and territory in Australia has different requirements as to what car modifications are legal. The following breakdown of each state explains whether or not you will be required to have your car certified before you can modify it, in order to then ensure your car insurance remains valid.

New South Wales

In New South Wales, you need to get your modified vehicle—or the vehicle you intend to modify—certified before you can apply for registration (and therefore insurance).

The car and its modifications must be assessed by a licensed certifier under the Vehicle Safety Compliance Certification Scheme (VSCCS), who will conduct inspections and tests to determine if the vehicle and its modifications are compliant.

“Your insurance could be void if you don’t have vehicle modifications assessed and certified as compliant with applicable standards,” the New South Wales government states on their website.

“You should tell your insurer of any modifications, and that the vehicle has been certified under VSCCS, once the modifications and certification are complete.”

Victoria

VicRoads says that vehicle modifications, such as those aimed at improving performance or appearance, may have “an adverse effect on the vehicle’s safety or emissions performance” and therefore are subject to government regulations.

These regulations require that all vehicle modifications must either be carried out in accordance with the official guidelines issued by VicRoads, or have VicRoads’ specific approval.

For modifications requiring specific approval, a Vehicle Assessment Signatory Scheme (VASS) approval certificate will be necessary. A VASS Signatory will inspect the vehicle and potential modification plans.

Upon being granted the VASS certificate, car owners will also be issued a blue modification plate to attach to their modified vehicle.

Queensland

Queenslanders wishing to modify their vehicles need to follow the government-mandated vehicle standards guidelines and relevant approved codes of practice.

This means vehicle owners will likely need to have their modifications inspected and certified to ensure any modifications have been performed in line with the Queensland Road Vehicle Modification Handbook.

Not all modifications need to be approved and certified, the Qld Department of Transport and Main Roads explains. Vehicle owners can understand which modifications do and do not need approval by downloading the Queensland Road Vehicle Modification Handbook.

If the modifications do require approval, a fee will be required. As of July 1 2023, that fee has been $106.50 for a vehicle up to 4,500kg and $59.75 for a vehicle over 4,500 kg (GST included).

South Australia

For motor vehicles up to 4,500kg, you will need approval before you commence modifications from the state government body, Vehicle Standards.

To apply for an inspection, you will need the:

• Vehicle identification number (VIN) or chassis number, if known
• Vehicle make, model, body type, and year of manufacture, if known
• Details of the modifications; and
• Verification of registration in Australia.

The South Australian government says it may take up to three weeks from receipt to Vehicle Standards for a review of your application to be conducted and advice provided back to you.

The requirements for different kinds of modifications—from vehicle modifications for people with disabilities to tinted windows—are explained on the government website here.

Tasmania

In Tasmania, modified vehicles will need to be inspected and certified at an Approved Vehicle Certifier Approved Inspection Station (AVCAIS) if the modifications change:

• The performance of the vehicle; or
• The vehicle in a way that makes it no longer comply with Australian Vehicle Standards.

Vehicles can be inspected at a range of locations across the state; however, you need to ensure that your type of vehicle is able to be approved by the specific Approved Vehicle Certifier/s (AVC) working at that location.

To book an inspection, you will need to contact the appropriate AVCAIS directly.

Northern Territory

In the NT, many minor modifications may be carried out on a vehicle without obtaining approval. These are usually modifications that would not affect the level of safety, strength or reliability of vital systems in the vehicle like braking or steering.

‘Basic’ modifications, including engine substitution, seating changes and suspension modifications will need to be assessed and approved at a government inspection facility within the state.

However, when the modification is not classed as a basic modification or a minor modification according to the Northern Territory’s government, the vehicle will need to be inspected and assessed by a technical advisory committee.

In some instances, an engineering certification may also be required in which you will have to contact an approved engineer and pay a fee (set by the business itself).

These ‘significant’ modifications are classified as those that “have the potential to seriously affect the safety of your vehicle and may affect its strength, structural integrity and handling characteristics”, the state government explains.

Western Australia

In Western Australia, minor vehicle modifications can be carried out without specific approval. This includes adding roof racks, sun visors, tow bars, body markings, like-for-like engine replacements and more.

However, modifications that will affect the car’s performance or quality will need to be assessed by an Authorised Inspection Station (AIS) vehicle examiner, and then—if approved—issued a modification permit. These are known as ‘simple’ modifications according to the Western Australian Department of Transport (DoT).

For complex modifications, applicants will need to apply online and receive the approval of the Department of Transport’s CEO.

If approved, and once your modifications have been finalised and a written approval issued, you will need to undertake a vehicle inspection alike to the ‘simple’ modifications process. You will also be issued a modification permit.

For Western Australian drivers looking to modify their car, the DoT has a questionnaire on its website to help car owners understand which classification their modification falls under and therefore what application process they will be required to complete.

Australian Capital Territory

“If you modify or construct a light vehicle, it may need to be certified by an engineer. This needs to be done before it’s inspected or registered,” Access Canberra, an ACT government organisation explains via its website.

National Code of Practice (NCOP) for Light Vehicle Construction and Modification determines whether modifications need certification, and splits them into two categories:

• Owner certified modifications to light vehicles: these modifications don’t need prior approval or certification
• Significant or extensive modifications to light vehicles: these modifications need certification by a recognised engineering signatory

Vehicles that need certification must be inspected at the Access Canberra Motor Vehicle Inspection Station, Access Canberra explains, and must have a suitable engineering certification report.

Access Canberra will only accept engineering certification reports from people on the list of ACT Recognised Engineering Signatories.

Whether you are modifying your car for accessibility requirements, aesthetic purposes or for enhanced performance, it’s paramount that you understand the legal requirements within your state to ensure you’ll be compliant with road safety requirements.

Modifying your car can also modify your car insurance policy, and making sure your modifications are legal and approved is the first step to ensuring your policy remains valid.

Keep in mind that modifications may not void your policy, but may increase your premiums. Be sure to speak to your car insurance provider and read the product disclosure statement to understand how the modifications could affect your policy.

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