How Does Modified Car Insurance Work in Australia?
In a Nutshell: Insuring a modified car is more expensive and more restricted than insuring a standard vehicle. You must declare every modification — from engine upgrades to body kits to wheels. Undeclared modifications can void your insurance completely. Some insurers specialise in modified cars (Shannon's, Just Car); others will decline you.
What Counts as a Modification?
| Modification Type | Examples | Considered a Mod? |
|---|---|---|
| Engine | Turbo/supercharger, engine swap, ECU tune | ✅ Yes |
| Exhaust | Full system, performance headers, modified muffler | ✅ Yes |
| Suspension | Coilovers, lowering springs, lift kit, airbag suspension | ✅ Yes |
| Wheels & tyres | Different size to factory specs, custom rims | ✅ Yes (if non-standard) |
| Body | Body kit, spoiler, bull bar, wide-body | ✅ Yes |
| Interior | Bucket seats, roll cage, modified dash | ✅ Yes |
| Lighting | HID/LED conversions, light bars, under-glow | ✅ Yes |
| Sound system | Aftermarket stereo, subs, amplifiers | ⚠️ May need declaring if substantial |
| Colour change | Full respray to different colour | ⚠️ Must be declared |
| Performance air filter | Pod/cone filter, cold air intake | ✅ Yes |
Premium Impact by Modification Type
| Modification | Premium Increase (Typical) |
|---|---|
| Exhaust (cat-back) | +5% to +15% |
| Suspension (lowering) | +10% to +25% |
| Wheels (non-standard) | +5% to +15% |
| Body kit | +10% to +25% |
| Engine tune (ECU remap) | +15% to +30% |
| Turbo/supercharger upgrade | +25% to +60% |
| Engine swap (higher power) | +30% to +75% |
| Full roll cage | +10% to +20% |
| Sound system (over $2,000) | +5% to +15% |
⚠️ Critical: Multiple modifications compound the premium increase. A car with lowered suspension, aftermarket wheels, and a turbo upgrade could see +50–100% premium increase over stock.
Modified vs Standard Car — Premium Comparison
| Scenario | Annual Comprehensive (30yo, clean record) |
|---|---|
| Standard Hyundai i30 (stock) | $900 |
| Same car + lowered suspension + aftermarket wheels | $1,150 (+28%) |
| Same car + turbo upgrade + exhaust | $1,450 (+61%) |
| Same car + full build (engine, suspension, body) | $1,600–$2,000 (+78% to +122%) |
Best Insurers for Modified Cars
| Insurer | Modified-Friendly? | Notes |
|---|---|---|
| Shannon's | ✅ Excellent | #1 for modified cars — enthusiast focus |
| Just Car | ✅ Very good | Good for younger drivers with mods |
| Enthusiast Insurance | ✅ Very good | Classic and modified specialist |
| Club 4X4 | ✅ Good for 4WDs | Off-road modifications covered |
| Youi | ⚠️ Case-by-case | Call to discuss your specific mods |
| AAMI | ❌ Limited | Declines performance modifications |
| Budget Direct | ❌ Limited | Standard policy doesn't cover mods well |
| NRMA | ⚠️ Moderate | Some mods accepted — not performance-focused |
How to Insure a Modified Car
| Step | What to Do |
|---|---|
| 1 | List every modification — be thorough |
| 2 | Keep receipts — proof of value and type of parts |
| 3 | Get an engineering certificate |
| 4 | Use a specialist insurer — Shannon's, Just Car, Enthusiast |
| 5 | Get agreed value — mods add value; market value won't reflect them |
| 6 | Disclose fully — any doubt, disclose it |
| 7 | Review at renewal — add any new mods during the year |
What If You DON'T Declare Modifications?
| Scenario | If Mods Are NOT Declared |
|---|---|
| You have an accident | Insurer can deny the claim entirely |
| Your car is stolen | Insurer may reduce the payout or deny |
| You have a fire | If it's from the modified exhaust — denied |
| You're not at fault | The other driver's insurer pays, but yours may still have issues |
| At renewal | If they discover undeclared mods, they can cancel your policy |
💡 The rule is simple: If in doubt, declare it. Non-disclosure is the #1 reason for claim denial among modified car owners.
Key Takeaway
- Every modification must be declared — undeclared mods can void your insurance.
- Modified cars cost 15–100% more to insure than standard versions.
- Shannon's, Just Car, and Enthusiast are the best insurers for modified vehicles.
- Performance modifications (engine, turbo) have the biggest premium impact.
- Keep all receipts and get engineering certificates for major mods.
- Agreed value is recommended — modifications add value that market value won't reflect.
- Standard insurers (Budget Direct, AAMI) are not modification-friendly — go specialist.
- The more mods, the fewer insurers — be prepared for limited choices with heavily modified vehicles.
Last updated: July 2026
Disclaimer: This article provides general information about modified car insurance in Australia. Definitions of "modification" and policy terms vary by insurer. Always fully disclose all modifications to your insurer and obtain written confirmation of cover.