Attention car lovers: If you’re thinking of making a statement with some custom car modifications – or need some essential disability modifications – there are a couple of things you might want to consider first.
Maybe you want to add a little personality to your ride with shiny alloy wheels, custom-tinted windows or a sunroof. Or perhaps you rely on disability modifications to help you or a loved one travel more easily. Either way, these features – if they’re added after the car leaves the factory – might also make modified car insurance worth considering.
Not only that, but some vehicle modifications might also be subject to state and territory laws, with specific guidelines and standards in place to ensure your modified vehicle is suitable for safe use.
What does ‘modified’ actually mean in car insurance?
At Youi, we define a vehicle modification as “changes from the manufacturer’s specifications, made to the car at any time after it left the factory where it was built”.1
So, essentially, a modification is when alterations are made to the manufacturer’s standard body, engine, suspension, wheels or paintwork of your car. These changes are usually made to alter your car’s appearance, handling or performance.
But it’s worth remembering that not all modifications are purely cosmetic, nor are they exclusively the domain of car enthusiasts looking for some extra engine grunt. Vehicles might also be modified for safety purposes – particularly for people living with or caring for a person with a disability.2
What are some examples of car modifications?
Modifications aren’t always huge changes – in fact, you might be surprised about what constitutes a modification.
Some examples of optional modifications include:3
- Tinted windows
- Alloy wheels
- A sunroof
- Custom paint
- New audio system
- Turbochargers or superchargers3
- Non-standard or modified tray backs.
How do optional modifications affect my car insurance?
If you’re planning to modify your vehicle, there are certain modified vehicle insurance issues you might want to be aware of.
“Modifying your vehicle can increase your premium if it increases the value of the car or the cost of repairs if it’s damaged in an insured event,” explains Marni Jackson, Youi’s Head of Product – Vehicle and Lifestyle.
Depending on your policy, some minor additions, such as tinted windows, may be automatically covered, provided they’re legal in your state or territory. Even so, it’s important to let your insurer know about any after-market alterations as some may have a greater impact on the value of your car, as well as the cost of repairs.
For example, if your vehicle has a custom paint job or bumper and is involved in an accident that results in damage to the front-end of the car, standard repair quotes may not apply. Depending on the nature of the custom modifications, the costs for this type of work could increase dramatically.
This is also true in the case of mechanical improvements to a vehicle, such as suspension, exhaust, engine or braking systems. These types of upgrades can typically mean your vehicle will cost more to fix after serious damage that requires more than cosmetic work.
At Youi, with our Comprehensive and Third Party Fire & Theft policies, we may offer insurance for modified cars that have been legally modified to improve performance or handling, provided you tell us about these modifications and we agree on any specific amounts that are applicable.3
What are disability car modifications?
Disability modifications for vehicles are a bit different from the modifications listed above and typically serve a different purpose. Disability modifications are changes to a vehicle designed to make it safe and accessible so you can drive it, ride in it as a passenger, or transport passengers with a disability in it.2
They may include:2
- Passenger hoists
- Wheelchair hoists
- Modified controls
- Car seats and restraints.2
If modifications like these are made to the vehicle, government disability support agencies – such as the NDIS – may offer additional vehicle modification support. This may include assessing, trialling and adjusting a vehicle modification, removing modifications from an old vehicle and fitting them to a new vehicle and help with your transport needs while your vehicle is fitted with modifications.2
It may be in your best interest to look at your options before making any modifications so you can make a more informed choice and discuss them in relation to your car insurance.
Are disability car modifications covered by car insurance?
Whether modifications – if any – are covered by a policy depends on many factors, including the insurer and the car insurance type.4 If you’re considering an insurer, you can check with them directly or read the policy Product Disclosure Statement (PDS) to find out if and how they cover disability modifications.5
With Youi’s Comprehensive car insurance, if you have disability car modifications, you’ll need to specify the amount you want them to be covered for when you take out the policy. This amount represents the most we’ll pay to repair or replace the modifications if you make a claim. If your car is deemed a total loss, we’ll settle your claim by paying you the market value or agreed value of the vehicle (depending on your policy), plus an amount for the disability modifications.5
Which cover should I consider for modified car insurance?
Most insurers don’t specifically offer car insurance for modified cars, but you may be able to get cover under a general policy that includes approved modifications.3
While the best choice for you will always depend on your individual needs and circumstances, Canstar notes that comprehensive car insurance will generally provide the highest level of cover for modified vehicles.3
For example, as standard, Youi Comprehensive car insurance provides cover for your car if it is:
- Stolen6
- Damaged in an accident, even if you’re the at-fault driver7
- Damaged by fire,8 earthquake,7 storms, hail or flood.9
Canstar also says that insuring a modified car for agreed value – a specific amount you agree with your insurer – rather than for market value, or what your car would be worth on the open market, could be beneficial. This may provide more certainty on the payment you’d receive if you need to make a claim and your car is deemed a total loss.3
What happens if I don’t tell my insurer about modifications to my car?
If you haven’t informed your insurer about your vehicle’s modifications and you need to make a claim for damage caused by an insured event, repair or replacement of those modifications may not be included in your claim settlement.
“For example, if you’ve decked out your car with accessories or made modifications for your camping adventures, you should let us know when you start your policy or if you make those additions later on. These changes can increase your car’s value and may affect how we assess your risk and premium. And if you need to make a claim, damage to any accessories or modifications won’t be covered unless you’ve told us about them,” says Jackson.
Differences between legal and illegal car modifications in Australia
Did you know some modifications aren’t legal on Aussie roads? Exactly what’s legal depends on your state or territory,10 but here are some examples of what may or may not be allowed, depending on where you live.
| May be legal | May be illegal |
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How do I know if my modification is legal?
A modification such as a custom paint job probably won’t cause many problems in terms of legality, but any modifications that aren’t legal in your state or territory could result in a defect notice or an expensive fine. They could even compromise your safety or your insurance cover.
In New South Wales,12 if you have a modified vehicle, you may need to get it certified before you can apply for registration. In Queensland, some modification plans may need to be reviewed and approved before the modification is made.13
If you’re thinking of modifying your car, it’s best to check with your state or territory government about requirements and guidelines:
- New South Wales
- Victoria
- Queensland
- Western Australia
- South Australia
- Tasmania
- Australian Capital Territory
- Northern Territory
Modified car insurance for younger drivers
Younger drivers might want to modify their vehicle for speed and looks. However, insurance for younger drivers with provisional licences could be affected or even denied because of certain custom add-ons.
In NSW,14 Queensland,15 SA16 and Victoria,17 P-platers are banned from driving certain high-powered or sports modified cars.18
If you’re insuring a younger driver for a modified car, it’s worth checking whether they can legally drive it.
How modified car insurance works at Youi
Want to know more? We’ve answered some frequently asked questions about Youi’s modified vehicle insurance below.
Does Youi offer modified car insurance?
Yes, in some cases. If your car is legally modified and you declare the modifications, we may agree to cover it under our Comprehensive and Third Party Fire & Theft policies. You can find out more about what’s covered by checking our Car PDS.5
How do I cover modifications on my Youi policy?
Getting car insurance for a modified vehicle is simple! If you have an Agreed Value policy, you’ll just need to make sure your insured value accounts for the cost of your optional modifications.
If you have a Market Value policy, you can nominate an amount for accessories and/or modifications which will be noted on your policy schedule. This amount represents the most we’ll pay to repair or replace those modifications if the car is not a total loss. If your car is deemed a total loss, we consider available market examples of vehicles with similar modifications when determining the market value of the car.5
Some additions to the car are automatically covered under Youi’s Comprehensive and Third Party Fire & Theft policies, including personalised plates, towbars and window tinting.19
At Youi, disability modifications are covered separately. If your vehicle has these modifications, you’ll need to specify an amount for these on your policy. If you need to make a claim involving disability modifications, the most we’ll pay for them is the amount shown on your policy, and this is paid in addition to the agreed value or market value of your car if it’s deemed a total loss.5
Can I update my car insurance if I modify my vehicle?
Made some changes to your ride? It’s important to let us know as soon as possible, in case we need to update your insurance. If you don’t let us know, you may not be covered.5
If your modifications have affected your excess, premium and/or the special conditions for your policy, we’ll let you know when we send your updated policy schedule.5
Despite the costs that can come with custom modifications, the appeal of a unique vehicle with extra features is worth it to many car lovers. While many standard modifications are fine from a legal standpoint, it’s always worth checking the laws in your state or territory, and disclosing any and all add-ons to your insurance company in case they’ll affect your cover.
To learn more about Youi’s modified car insurance options, visit our car insurance page. If you’re considering a car insurance policy for your modified car with Youi, consider starting a quote or give us a call on 13 9684 (YOUI).
1 For full details, see the PDS.
2 Source: NDIS – Vehicle modifications and specialised driver training, March 2025
3 Source: Canstar – Car insurance for a modified car, May 2025
4 Source: Canstar – What does car insurance cover?, November 2024
5 Exclusions, limits and additional fees may apply. For full details, see the Car Insurance PDS.
6 Available with Comprehensive and Third Party Fire & Theft policies. For full details, see the PDS.
7 Available with Comprehensive policies only. For full details, see the PDS.
8 Loss or damage caused by a bushfire within the first 72 hours of your policy commencing is only covered in limited circumstances. Available with Comprehensive and Third Party Fire & Theft policies. For full details, see the PDS, TMD and your policy schedule.
9 Loss or damage caused by storm, hail or flood within the first 72 hours of your policy commencing is only covered in limited circumstances. Available with Comprehensive policies only. For full details, see the PDS.
10 Source: Carsales – What car modifications are illegal?, June 2022
11 Source: Drive – ‘Extremely anti-fun’: The surprisingly illegal car modifications, October 2025
12 Source: NSW Government – Modified and non–standard vehicles
13 Source: Qld Government – Vehicle modifications, July 2025
14 Source: NSW Government – P1 & P2 drivers
15 Source: Qld Government – Provisional licence restrictions, October 2022
16 Source: SA Government – High powered vehicles
17 Source: Transport Victoria – Vehicles for probationary drivers
18 Source: Drive – What cars can P-platers drive in Australia?, 2023
19 Available with our Comprehensive and Third Party Fire & Theft policies, and subject to any applicable excesses. For full details, see the PDS.
