Car Modifications and Insurance: What To Know In Australia

Modifying a car simply means changing it from how it left the factory — anything from window tint and alloy wheels to upgraded brakes, suspension, engine tunes, disability controls or a full wheelchair conversion. Great mods can make your car safer, faster or more usable, but they also change its value and risk profile. That’s why insurers care. Some changes are fine under your current policy once disclosed, others need certification or specialist cover, and illegal modifications can void insurance altogether.

This guide explains, in plain English, how car modifications interact with insurance in Australia. You’ll learn what insurers count as a modification (and what’s just an accessory), the legal basics under the Australian Design Rules and state/territory standards, and which common mods are typically legal or not — and why that matters for cover. We’ll unpack how modifications affect premiums, excesses and your quote‑to‑value ratio, when to choose agreed value over market value, and your duty to disclose. You’ll also get checklists for buying a used car with mods, pitfalls around theft, mechanical failure and motorsport, rules for young drivers, pointers for disability and mobility conversions, and what changes if you drive for rideshare or business. Finally, we’ll outline how to compare policies and make a claim confidently on a modified vehicle.

What counts as a car modification in Australia

In insurance terms, a modification is any change made after the car left the factory that alters its appearance, performance, handling, safety or accessibility — whether fitted by you, a dealer or a licensed workshop. That includes simple tweaks (like window tint) and significant upgrades (like suspension lifts or engine tunes). For car modifications and insurance, assume that if it wasn’t standard equipment, you should treat it as a mod and be ready to disclose it; major changes that affect safety (e.g. suspension, height or engine performance) often require inspection and certification under your state’s rules.

Common examples that insurers treat as modifications include:

• Appearance tweaks: window tinting, custom paint, spoilers, sunroofs, alloy wheels.
• Performance/handling: upgraded brakes and suspension, wider tyres, exhausts, turbo/supercharger kits, ECU tunes/modified software.
• Structure/safety: roll bars, bull bars, sport seats.
• Tech/audio: aftermarket stereos and lighting.
• Accessibility: hand/foot controls, hoists, ramps, wheelchair conversions.
• Utility: towbars and roof racks (even if minor, still declare).

We’ll explain how accessories differ next, and why the distinction matters for cover and price.

Modifications vs accessories: what insurers treat differently

Insurers draw a line between “modifications” and “accessories” because it changes how they assess risk and value. A modification alters or replaces standard components and can affect appearance, performance, handling or safety; an accessory adds functionality without altering the vehicle’s structure. For car modifications and insurance this matters: significant mods may require certification and can push premiums up, while accessories are often simpler to cover — but you usually still need to disclose both.

• Typically treated as accessories: manufacturer-approved roof racks, towbars, floor liners, dash cams, basic audio head units.
• Clearly modifications: suspension lifts or lowering, wider tyres and alloy changes, performance brakes, aftermarket exhausts, ECU tunes, turbo/supercharger kits, roll bars, lighting changes, custom paint, disability controls and wheelchair conversions.

Tell your insurer about all additions. Undeclared changes can lead to claim issues, while agreed value can better reflect high-value modifications compared to standard market value cover.

Legal basics: ADRs, state rules and certification

Before you touch a spring, ECU or exhaust, know the rules your insurer will expect you to meet. Australia sets national standards through the Australian Design Rules (ADRs) and in‑service rules via the Australian Light Vehicle Standards Rules (ALVSRs). Each state and territory then applies its own Vehicle Standards Rules and approval processes. For car modifications and insurance, the golden thread is legality and proof: if a change needs certification, your insurer will usually want to see it.

• ADRs and ALVSRs: Your vehicle — and any modification — must continue to comply with national safety, emissions and anti‑theft standards. Mods can’t compromise ADR compliance.

• State/territory rules differ: Thresholds for ride height, tyres, tint and lighting vary. What’s acceptable in one state may need re‑approval in another. Always check your local requirements before fitting parts.

• Certification matters: Significant changes (e.g. suspension height, engine performance, braking, steering, seating, wheelchair conversions) often require inspection by an approved/licensed certifier and a mod plate or certificate. Keep this paperwork.

Insurers commonly limit cover to legal, approved modifications and may request evidence at quote or claim time. Illegal or uncertified mods can see cover declined or cancelled. Professionally installed and documented work is generally viewed more favourably than DIY, and can help when pricing or making a claim.

Common legal and illegal mods (and why it matters for cover)

There isn’t a single national “allowed list” — legality hinges on the Australian Design Rules and your state or territory’s vehicle standards. For car modifications and insurance, that legality line is critical: legal, certified changes are generally insurable, while illegal or uncertified ones can see cover denied or cancelled.

• Often legal (when compliant): bull bars and towbars; sound systems; custom paint; tinted windows within state limits; sunroofs; spoilers; alloy wheels/wider tyres that meet load/sizing specs; roof racks; sports seats; certified disability controls and wheelchair conversions.
• Commonly illegal or restricted: exhausts over set noise limits; window tint darker than your state allows; non‑compliant engine mods/tunes; lowering that breaches ground‑clearance rules (e.g. under 100mm per ADRs); unapproved lift kits; under‑body neon lighting; tyre sizes/load ratings outside manufacturer specs; replacing seatbelts with harnesses; unapproved payload/towing capacity upgrades.

Why it matters: insurers typically cover legal, disclosed mods and may ask for certification for significant changes. Illegal or undisclosed mods can void your policy, reduce payouts, or lead to declined claims — especially after accidents, theft or defect notices.

How modifications change your insurance cover

Once you change the car, you change the contract. Most insurers will cover legal, disclosed modifications, but they may add conditions, ask for certification, or limit what’s covered under a standard policy. Heavily modified cars or conversions often need a specialist insurer, and the way your car is valued becomes crucial to avoid underinsurance.

• Disclosure becomes mandatory: You’re generally required to tell your insurer about any modification. Undeclared changes can see claims reduced or refused.
• Certification may be required: Significant mods (e.g. suspension, engine, braking, disability conversions) often need inspection and approval. Insurers can ask for evidence.
• What’s actually covered: If declared and legal, many policies cover the modified parts like‑for‑like for insured events (accident, theft, fire). If not declared, payouts may revert to standard spec.
• Sub‑limits and caps: Some insurers only cover modifications up to a dollar cap or within set categories (common for accessibility gear). Know your limits before you buy.
• Usage exclusions apply: Track, racing or certain off‑road use is typically excluded; specialist cover is needed for motorsport or extreme builds.
• Mechanical failure isn’t an insurable event: Malfunctioning or worn parts (including mods) are usually excluded from cover.
• Repairer arrangements: Some providers offer choice of repairer for modified cars; others handle repairs through approved specialists. Keep your invoices and install records.

Next, we’ll cover how these changes flow into premiums, excesses and your quote‑to‑value ratio.

Price impacts: premiums, excess and your quote-to-value ratio

Once you modify the car, expect pricing to move. Insurers generally charge more for modified vehicles because changes add to the car’s value, can increase theft risk, and often cost more to repair or replace after an insured event. With car modifications and insurance, how your parts were fitted and documented also matters.

• Value and complexity: Expensive or performance mods (e.g. turbo/supercharger, ECU tune, suspension changes) typically lift premiums and may push you to a specialist.
• Legality and certification: Legal, certified and professionally installed work usually prices better than DIY or uncertified equivalents.
• Driver profile: Under‑25s are often charged more and may even be declined for higher‑risk builds in some states.

When comparing quotes, check the excess setting. Many Australian comparisons model a standard excess around $800–$1,000; changing your excess will change the premium you see. To judge value, use a simple benchmark: quote‑to‑value ratio = annual premium ÷ insured value (including declared mods). Aim for a low ratio without sacrificing proper cover for your modifications — and consider whether agreed value is needed to reflect them (next section).

Agreed value vs market value for modified cars

For car modifications and insurance, how your car is valued can make or break a payout. Market value pays what a similar, standard vehicle would sell for at claim time (after depreciation). That can undercook heavily modified or disability‑converted cars if the market doesn’t reflect your upgrades. Agreed value is a set figure you and the insurer lock in up front — typically higher premiums, but far more certainty if the car’s written off, and it can include declared, legal modifications. Expect to provide receipts, photos and any certification; some insurers cap mod amounts or won’t offer agreed value at all for complex builds.

• Choose agreed value when: you’ve invested in pricey mods, accessibility conversions, or uniqueness that the market won’t price fairly.
• Choose market value when: your changes are minor and broadly reflected in resale prices, and you want a lower premium.
• Either way: disclose all mods and keep documentation so your insured value actually matches what’s on the car.

Disclosure duties: when and how to tell your insurer

In Australia, you have a duty to tell your insurer about anything that could affect their decision to cover you — and that includes car modifications and accessories. Even minor, legal changes should be disclosed. Failing to declare mods can lead to higher excesses, reduced payouts, declined claims or policy cancellation, especially if a modification contributed to an accident or was illegal/uncertified.

Tell your insurer:

• Before you modify: ask if it’s covered, if certification is required, and how it affects price/cover.
• When quoting or at renewal: list all current mods so they’re included in your schedule and valuation.
• As soon as you make changes mid‑term: most policies require immediate notification.
• When buying a used car with mods: disclose what’s fitted and provide documentation.

What to provide:

• Full mod list and values: parts, brands, dates and who installed them.
• Proof and paperwork: receipts/invoices, photos, certification/mod plates, tuning reports.
• Usage notes: e.g. accessibility conversions, off‑road use (not racing), towing setup.
• Valuation preference: ask for agreed value that includes declared, legal mods and check any sub‑limits or caps.

If your insurer won’t cover certain mods or demands restrictive terms, consider a specialist policy that accepts certified modifications and can value the vehicle appropriately.

Buying a used car with mods: insurance checks before you commit

A pre‑loved modified car can be brilliant value — or an insurance headache. Insurers care most about legality, documentation and who did the work, so do your homework before you hand over cash. Many mainstream policies only cover legal, certified and disclosed changes, and heavier builds may need a specialist policy or agreed value to avoid underinsurance.

• Get a written mod history: request a full list of modifications with receipts, photos and any approval/mod‑plate certificates from a licensed certifier. Compare the Market advises getting a written record of changes from the seller.
• Verify legality in your state: ride height, tint, tyre size/load and exhaust noise limits vary by jurisdiction; illegal or uncertified mods can void cover.
• Check who installed it: professionally installed, documented work generally prices and insures better than DIY.
• Sound out insurers early: ask your current insurer if they’ll accept the car and at what premium; if not, approach specialist modified‑car providers and note any caps (e.g. on disability equipment).
• Set the right valuation: ask for agreed value that includes declared, legal mods and confirm any sub‑limits.
• Assess intended use: mainstream policies exclude racing/track; if the car’s been built for motorsport, you’ll likely need specialist cover.
• Consider licence rules: P‑platers in QLD, NSW, VIC and SA face bans on certain high‑powered/modified vehicles — confirm eligibility.
• Run the numbers: compare quotes and your quote‑to‑value ratio against the insured value (mods included) to avoid paying more for less cover.

Coverage traps to watch: theft, mechanical failure and motorsport

Plenty of modified‑car claims stumble on the same three traps. Keep these front of mind when weighing car modifications and insurance so you’re covered when it counts.

• Theft of mods: Cover generally applies only if the modifications are legal, declared and part of a comprehensive or third‑party fire and theft policy. Keep receipts, photos and certification; some insurers set dollar caps, or you may need agreed value to reflect upgrades. Undeclared mods can see theft claims denied.

• Mechanical failure: A malfunctioning or defective modification is usually classed as wear, tear or a mechanical fault — not an insurable event. If an aftermarket part fails, insurers typically won’t pay to repair the failed component.

• Motorsport and track use: Racing, timed events and many track days are excluded under standard policies. Off‑road use can also be restricted. If you build for motorsport or frequent trails, check your PDS for exclusions and consider specialist cover that explicitly includes that use.

Young drivers and modified cars: rules and insurer restrictions

If you’re under 25 — especially on P‑plates — you face two hurdles. First, several states (QLD, NSW, VIC, SA) restrict P‑platers from driving high‑powered or performance vehicles. Second, many insurers load premiums for young drivers and may decline cover on cars with performance‑or safety‑affecting mods. Even legal mods must be disclosed; illegal or uncertified work can void your policy entirely.

• Confirm licence eligibility: Make sure your car and its mods comply with your state’s provisional restrictions.
• Stick to low‑risk changes: Cosmetic or compliance‑friendly tweaks price better than engine tunes, exhausts, or height changes.
• Use professionals and certify: Approved installers and paperwork help with acceptance and pricing.
• Tell your insurer first: Ask if the mod is covered, what it’ll cost, and if certification is needed.
• Expect higher premiums/excess: Shop around; some providers won’t cover under‑25s with heavier mods.
• Consider specialists: Heavily modified cars may need a modified‑car insurer willing to offer agreed value.

Disability and mobility modifications: insurance and funding pointers

Accessibility upgrades — from hand or foot controls to hoists, ramps and full wheelchair conversions — can be fully insurable when they’re legal, disclosed and properly documented. For car modifications and insurance, treat mobility equipment like any other significant mod: certification, proof of professional installation and accurate valuation are essential. Funding help may be available too; the NDIS can contribute to necessary vehicle modifications, and state schemes such as Victoria’s TAC may assist with costs (including, in some cases, the higher insurance cost versus an unmodified car).

• Disclose everything: List all disability modifications, their values and who installed them; provide receipts, photos and certificates.
• Prove compliance: Keep ADR/state approval evidence (e.g. mod plate/certifier report) and any OT assessment recommending the mods.
• Ask about sub‑limits: Some policies cap assistive tech (e.g. around $5,000); clarify limits or opt for a specialist disability policy.
• Consider agreed value: Lock in a figure that includes the cost of conversions and fitted equipment.
• Confirm who may drive: Check cover for family/support workers who regularly drive the vehicle.
• Know exclusions: Mechanical failure of assistive devices is usually not an insurable event; maintenance remains your responsibility.

Commercial, rideshare and delivery vehicles with mods

If your vehicle earns its keep — driving for rideshare, hauling parcels or serving as a work ute — both your usage and your car modifications matter to insurers. Many standard policies don’t cover business activities like rideshare or delivery unless you’ve told them, and they’ll expect all modifications to be legal and documented. Heavier or safety‑affecting changes (suspension, seating, lighting, payload) may also need certification. To keep cover watertight, declare the business use and every fitted item, and make sure your insured value reflects the full fit‑out.

• Declare the use and mods: Misclassifying private vs rideshare/courier/taxi or failing to disclose mods can see claims refused.
• Know the common “business mods”: towbars, roof racks, cargo barriers, partitions, bull bars, LED light bars, company signage/wraps, dashcams, meters, telematics/trackers — all should be disclosed.
• Get certified where required: Changes affecting safety/standards (e.g. seating, suspension, lighting, payload) typically need approval; keep mod plates/certificates.
• Value the whole setup: Consider agreed value to capture fit‑outs and equipment; check any sub‑limits on accessories or assistive tech.
• Consider add‑ons for downtime: Hire car after accident, windscreen cover and roadside assistance can be worth it for business continuity.

How to shop for modified car insurance (what to ask and compare)

Buying cover for a modified car is a conversation, not just an online form. Start by listing every change, gathering receipts, photos and any certification, then ask insurers to confirm acceptance in writing. For car modifications and insurance, don’t chase the cheapest premium alone — ensure your legal, disclosed mods are actually covered and valued correctly, and use specialist insurers when builds are extensive.

• Acceptance and legality: Will you cover all declared mods? Do you require specific certification/mod plates?
• Schedule accuracy: Will every modification be itemised with its value on my policy schedule?
• Sub‑limits and caps: Are there dollar caps on mods or assistive tech? How are stereos/wheels treated?
• Agreed value: Can I insure on agreed value that includes the cost of my mods?
• Usage: Is rideshare/courier/off‑road driving covered? What motorsport/track exclusions apply?
• Driver limits: Any restrictions or loadings for under‑25s/P‑platers with this setup?
• Repairs: Do I get choice of repairer? Will modified parts be replaced like‑for‑like (OEM/aftermarket)?
• Theft cover: Are modifications insured if stolen, and at what value?
• Excess and pricing: What excess options do I have, and how do they change premium?
• Value sense‑check: My quote‑to‑value ratio is premium ÷ insured value — is there room to sharpen price without cutting cover?

Claims on a modified car: evidence, repairs and repairer choice

When you claim on a modified vehicle, insurers want proof that what’s fitted is legal, disclosed and actually on the car. If your modifications are on record and compliant, many policies will repair or replace them like‑for‑like after an insured event; illegal or undeclared mods can see payouts reduced, limited to standard spec, or refused altogether.

What to submit with your claim

• Full mod list and values: parts/brands, dates and who installed them.
• Proof of fitment: invoices/receipts, clear photos, dyno/tune reports where relevant.
• Compliance evidence: state certification/mod plate and any engineer/certifier reports.
• Police and incident details: for theft or malicious damage, include the report number.
• Valuation info: if on agreed value, ensure your schedule itemises the mods.

Assessment and repairs: key points

• Legality check: assessors may verify certification or request a re‑inspection for structural/performance changes.
• Like‑for‑like parts: ask for equivalent quality (OEM/aftermarket) for declared mods; note any sub‑limits.
• Repairer choice: some policies allow you to choose; others use approved networks. Clarify before authorisation.
• Specialist workmanship: complex mods may be sent to approved specialists; keep install documentation to speed this up.
• Parts availability: if discontinued, expect nearest equivalent or a cash‑settlement discussion.
• Re‑certification: structural repairs (e.g. suspension, seating, conversions) may need fresh certification — keep new paperwork.
• Exclusions still apply: mechanical failure isn’t an insurable event; track/racing use is typically excluded.
• Logistics: confirm towing after an insured event, hire‑car entitlement (often an optional extra), and the applicable excess.

Handled well, a strong paper trail gets you back on the road faster and protects the value you’ve invested in your upgrades.

How National Cover can help modified car owners

If you’ve invested in upgrades, you need an insurer that understands car modifications and insurance in Australia. National Cover helps you declare and document legal, certified mods, builds policies for value, and backs you with hands‑on support when you need it most — from [quotes](https://nationalcover.com.au/tag/car-insurance-quote/) to claims.

• Tailored guidance: Help confirming what’s legal, what needs certification, and what to disclose.
• Fair valuation: We include declared modifications in your insured value to reduce underinsurance risk.
• Price‑beat promise: Bring a competing quote or renewal and we’ll beat it where possible.
• Business‑ready: Cover for rideshare, taxi, courier and fleet vehicles with disclosed fit‑outs.
• Easy claims: Simple email lodgement, expert claim support 365 days a year.
• Quality repairs: Lifetime warranty on all repairs we arrange.
• Keep moving: Replacement car on not‑at‑fault claims and 24×7 towing after insured events.
• Lower out‑of‑pocket: Excess discount when you use our preferred repairers.
• Switch anytime: We’ll help you change over mid‑term and explain any return premium.

Conclusion

Modifying your car should be rewarding, not risky. The golden rules are simple: keep changes legal and certified, disclose everything, and make sure your insured value reflects what’s actually on the vehicle. That’s where smart choices like agreed value, clear documentation and the right usage cover (private, business or rideshare) protect both your wallet and your build. If you’re buying a used car with mods, verify the paperwork first; if you’re claiming, have your proof ready and ask for like‑for‑like repairs.

If you want sharp pricing without cutting protection, get expert help that understands modified vehicles. National Cover can document your legal mods properly, value them fairly and support you at claim time — with a price‑beat promise, lifetime repair warranty and 365‑day assistance. Ready to insure your build with confidence? Start with a tailored quote at National Cover.