By Ambareen Musa
There are big downsides to modifying your car, writes Ambareen Musa, founder and CEO of Souqalmal.com
Whether you’re looking to tune up your car engine or upgrade your ride with shiny new allow wheels, car modifications can elevate the look of your car and even improve its performance.
But there’s a big downside to modifying your car – it will drive up the cost of your car insurance, or even worse, may lead to your insurance claim being rejected.
The Souqalmal.com team helps answer all your questions about the impact car modifications will have on your car insurance coverage.
Why do modifications increase the cost of insuring your car?
Modifications that affect the performance of a vehicle usually increase the risk of an accident, and therefore, may result in a higher premium. Examples include a modified turbocharged engine and changes made to the brake system, suspension system, gearbox and chassis.
On the other hand, modifications that improve the aesthetics of your car and boost its value increase the risk of theft. Modifications like custom paint, alloy rims and even an upgraded stereo system, increase the car’s appeal to thieves, and hence drive up your insurance premium.
How do insurers treat car modifications?
Insurers, based on their sole discretion, may choose to deny coverage for modified cars, extend coverage to minor modifications only, or charge a substantially higher premium for covering major modifications.
In fact, most insurers in the UAE only cover modifications that have been made through the authorised dealer or showroom, and not third party workshops. The car owner may be asked to produce receipts of the modification work done, at the time of applying for a policy.
If major modifications have been done through an external workshop, you may only be eligible to apply for a TPL (Third Party Liability) insurance policy.
How can you make car modifications during the insurance term?
You must inform your insurance company about any modifications made to the car during the on-going term of your car insurance policy. The insurer will update your current policy with the changes and may ask you to pay an additional premium for the coverage to be extended to the modified parts.
If you fail to inform your insurer beforehand, you would risk getting your insurance claim rejected in the future.
If you’re planning to modify or customise your car, it’s best to first check with your insurer if they will cover the changes being made. It is also worth checking how much extra you’ll have to spend on your insurance premium so you can incorporate that in the total expense of modifying your car.
How can you insure a car that has already been modified?
Insuring a modified car? Your insurer may now ask you to produce a ‘modifications certificate’ at the time of applying for an insurance policy.
What is a modifications certificate, and how can you apply for it?
Following an official decision (No. 45 of 2016) by the UAE Cabinet, all owners of modified cars now need a ‘modifications certificate’ from the Emirates Authority for Standardization & Metrology (ESMA).
This regulation is aimed at ensuring that all modified vehicles meet the safety standards of roadworthiness, to be legally driven on UAE roads. Prior to this initiative, there was no way for car owners to verify the safety of the modifications and customisations made to their vehicle.
A new inspection center was launched last year for the specific purpose of inspecting modified cars. The center is located in Yas Marina Circuit, Abu Dhabi. This is how the process works:
If you’re considering buying a used car that has been modified, you must ask the seller to provide you with the modifications certificate. Doing this will help make sure you don’t end up getting stuck with a car that doesn’t meet the regulatory standards of safety.