Every car owner loves to modify their car, whether it’s dropping in a burbling new exhaust, bolting on a spoiler, or tuning the engine for extra kick. It may be because they want to stand out, join cultural car shows, improve vehicle performance, or help the car go off-road.

Installing premium car parts can make your vehicle stand out on the Melbourne streets. However, all these exciting mods come with a warning, you must ensure they don’t run afoul of insurance rules and you might want to check with your insurer before making these changes.

If you’re still deciding between factory and aftermarket parts or unsure how to choose the right upgrades, check out these helpful guides from Mars Performance on choosing the right aftermarket accessories and OEM vs. aftermarket car parts. These articles offer practical advice for enthusiasts who want to upgrade their ride with confidence.

But remember, every car modification carries some risk, and it can go from exciting to costly if it’s left uninsured. That’s why, in this guide, we’ll explain how to enjoy your upgrades while keeping your insurance coverage intact, with a focus on Australian regulations and practical solutions for mod-loving drivers.

The Thrill of Modding vs. The Risk to Insurance

Every car modder knows the satisfaction of improving a vehicle’s performance or aesthetics. In fact, the passion is so widespread that over 72,000 Australians recently signed a petition urging authorities to ease the strict rules on vehicle modifications, as of this writing.

Australians know that the laws allowing modifications to cars and four-wheel drives are too restrictive and carry penalties that are too harsh. This showcases just how large and enthusiastic the modding community really is.

So, just like in Spider-Man, with great power comes great responsibility, which same applies to the passion for modifying your car: with passion comes responsibility. If you don’t play by the rules, insurers may refuse to cover your pride and joy.

A RateCity report noted that “even the slightest of modifications can alter the cost of your premium significantly,” and some mods can void your existing policy altogether. In other words, adding something as minor as a set of non-standard wheels or a cold-air intake could hike up your insurance costs, or worse, invalidate your coverage, if not handled properly. Clearly, it’s crucial to understand how mods and insurance intersect.

At the end of the day, it’s important to make sure your car insurance provider knows about your modifications. Most importantly, you should first check your Product Disclosure Statement (PDS) to understand the inclusions and restrictions specific to your policy, and how they could affect you.

Why Car Mods Can Void Your Insurance

Insurance companies base their coverage on the car’s specifications and risk profile. When you change the car’s specs through modifications, you potentially change the risk:

• Increased Accident Risk: Performance mods like engine tuning, turbochargers, or sports suspension can make a car faster or alter handling, which insurers may see as increasing the chance of an accident. If a modification makes the vehicle less safe or stable, it’s a red flag for both law enforcement and insurers.

• Higher Theft Risk: Cosmetic upgrades and high-end parts such as custom paint, expensive rims, premium audio systems can make your car more attractive to thieves. A car that stands out might be more likely to be stolen and prone for the eyes of thieves and also leading insurers may raise premiums or exclude coverage for those parts.

• Changes in Car Value: Many modifications can increase your car’s value—for example, a set of premium alloy wheels or a performance brake kit isn’t cheap. This means if you make a claim, your insurer may have to pay more to repair or replace your car. As a result, modified vehicles often come with higher premiums because their total insured value goes up.

• Non-Disclosure Issues: Perhaps the biggest pitfall is failing to disclose your mods. If you modify your car and you did not inform your insurer, you risk having any future claim may be denied due to nondisclosure. 

Insurers in Australia require you to list all non-factory modifications on your policy. Remember, clear and honest communication is the key to maintaining your coverage. In simple terms, keeping secrets about your car’s upgrades can cancel your coverage entirely.

Each car modification can affect your insurance differently, as not all insurers accept the same types of upgrades. What one provider covers, another might reject. That’s why it’s important to know which mods are generally accepted—and which ones are likely to cause issues with your policy.

Common modifications that most insurance companies are willing to cover include:

1. Upgraded alloy wheels

2. Chrome exhaust upgrades

3. Leather upholstery

4. Bike racks

5. Roof-mounted storage racks

6. Bullbars

7. Additional driving lights

8. Sway or stabiliser bars

9. Rearview or reversing cameras

10. Tow bars

11. Sunroofs

12. Air shock systems

13. Car alarms and security systems

14. Enhanced audio or stereo setups

15. CD changers

16. Extra exterior lighting

17. Standard single-tone air horns
    

On the other hand, the following modifications are typically not covered by standard insurers:

1. Custom or artistic paint jobs

2. Loud and non-compliant exhaust systems

3. Engines that run on nitro or hydrogen

4. Installation of roll bars or safety cages

5. Racing seat harnesses

6. Turbocharged or supercharged engine setups

7. Window tints that exceed legal darkness limits

8. Tyre upgrades that don’t meet approved specs

9. Suspension modifications that break legal standards

10. Changes to the chassis without proper approval

11. Any engine modifications that aren’t road-legal or ADR-compliant

Always make sure that any modification you add is legal and meets the standards set by your state or territory. You can check out this guide from Mars Performance on car modification laws in Australia..

If a modification breaks vehicle standards or road laws, for example, installing a high-powered engine beyond approved limits, adding overly dark window tints, or making unengineered changes to the chassis, it can make your car unroadworthy. And if your car isn’t roadworthy or legally compliant, no insurer will cover it.

We’ll explore legal compliance more in the next section, but remember this: if a mod violates the law, it doesn’t just risk safety, it can make your policy worthless when it’s time to file a claim.

Know the Law: Modifications and Australian Regulations

Before you bolt on that new part, do your homework on the legal side. Australia has strict safety rules for vehicles. Each state and territory has its own set of guidelines, but they all follow the national Australian Design Rules (ADRs), which outline what’s safe and legal when it comes to modifying your car.

• Major Mods Often Require Certification: If you make significant changes, anything that affects structural integrity, performance, or emissions, you usually need an engineer’s inspection and certificate. 

For example, New South Wales (NSW) requires that major modifications be assessed by a licensed certifier under the Vehicle Safety Compliance Certification Scheme (VSCCS). You’ll only get your car registered (or keep it registered) after the certifier issues a compliance certificate for the mods. 

Furthermore, the NSW government explicitly warns: “Your insurance could be void if you don’t have vehicle modifications assessed and certified as compliant with applicable standards”. In short, if you add a turbo kit or swap your suspension in NSW, get the VSCCS certificate or risk driving uninsured.

• Notification and Approval: In Victoria (VIC), home to Melbourne’s vibrant car scene, you must notify VicRoads within 14 days of making any mod that changes your vehicle’s description. 

Some alterations will require a VASS approval certificate (issued by a VicRoads-authorized engineer) and an inspection to check the car. The rule of thumb is to ensure the mod complies with VicRoads’ vehicle standards before you do it. 

You must take note that if your modification makes the car non-compliant or unroadworthy (fitting tyres smaller than the factory minimum or removing emission controls), VicRoads won’t accept the change and your car’s registration, and thus insurance can be put into jeopardy. 

• Each State is Different, But Principles Are Same: Other states have similar frameworks. Queensland, for instance, has a code of practice (the LS9/LS10 for lifts, etc.) and often requires pre-approval for certain mods. 

Meanwhile South Australia, Western Australia, and others all mandate that mods must meet ADR and local vehicle standards. Generally, modifications to a vehicle need to be certified and comply with ADR standards for the state they are registered in before they can be driven on the road. 

If you ignore this and drive with illegal mods, not only can police defect or fine you, but any accident may leave you uninsured because you were essentially driving an unroadworthy vehicle.

• Keep Documentation: If you go through the certification process (engineer certificates, mod plates, etc.), hang on to those documents. They are proof that your car is legally modified. Insurers may ask for them, and in the event of a claim or even just renewing your policy, being able to show that your aftermarket premium car parts were installed to code and approved can smooth the process. 

For example, if you’ve installed a premium brake kit and got it certified, inform the insurer and they’ll note that the car still meets safety standards, this could save your coverage.

To summarize it up, always check your local vehicle modification laws. It’s wise to consult a licensed vehicle engineer or mod-plating service before making big changes. Ensuring your mods are road-legal is step one in keeping your insurance valid.

Common Modifications Enthusiasts Make (and Their Insurance Impact)

Car lovers swap out and upgrade all kinds of parts. Here are some of the most popular modifications in the enthusiast community and what they could mean for your insurance:

Wheels & Tyres 

Upgrading to alloy wheels or wider tyres is very common. Quality mag wheels or performance tyres can improve grip and style. Generally, insurers don’t mind wheel upgrades as long as they’re within legal size/width limits and load ratings. 

In fact, many policies automatically cover accessories like alloy wheels. However, fitting wheels or tyres outside your car’s specifications (e.g. enormous rims or very low-profile tyres that aren’t approved) can make the car unroadworthy.

Suspension Modifications

This includes lowering your car like sports springs or coilovers, raising it like using lift kits for 4x4s, or stiffening it by using stabilizer bars and performance shocks. 

Suspension changes materially affect handling and safety, so they’re heavily scrutinized. A mild drop or lift within legal limits and done professionally can be insured (possibly with a premium increase). 

Oppositely, excessive lowering or lift without engineering approval is illegal and a known trigger for defect notices. Insurers will not cover an illegally “slammed” car. 

Any suspension mod likely falls under “significant modification” requiring inspection in many states. If you add, say, a lift kit in Melbourne, get a VASS cert if required and inform your insurer.

Engine and Performance Upgrades

The heart of the beast are mods like turbochargers, superchargers, engine swaps, ECU tunes, cold air intakes, sport camshafts, etc. which can seriously boost power. 

However, insurers see dollar signs because of its higher repair costs and risk here. Many mainstream insurers won’t cover major performance mods at all unless you find a specialized policy. 

For instance, adding a turbo to a non-turbo car might be a deal-breaker with standard insurance. Some insurers exclude engine performance enhancements or require a hefty premium increase and higher excess. 

As a rule, any change from factory spec on your engine or drive train must be disclosed. Also, we said this earlier so we will say it again, ensure the mods are street-legal: an illegal engine mod like a racing nitrous oxide kit or disabling emissions controls will void insurance on the spot. 

Additionally, if you’re chasing horsepower, be prepared to shop for an insurer that caters to modified cars and to pay more for coverage.

Exhaust Systems

Every car enthusiast often replaces the stock exhaust for a free-flowing one. This is because of more power or sometimes just a better sound. A premium sports exhaust can be a great upgrade, but keep it within legal noise limits and emissions standards. 

A deafening or illegally loud exhaust is usually not allowed and not covered. Insurers typically will cover an upgraded exhaust if it’s legal; it might even fall under common allowed mods. 

Just let them know you’ve changed it. If your new exhaust is significantly pricier than stock, your premium may inch up a bit to account for the higher replacement cost.

Brakes and Handling

High-performance brake kits like big brake calipers or drilled rotors or additions like a roll bar for chassis stiffening can improve safety and performance. From an insurance standpoint, brake upgrades are generally seen positively since this makes the car stops better which is safer. 

In fact, it’s listed as a modification that often does get covered by insurers. Still, any non-standard brakes should be noted on your policy. Roll bars or roll cages are a mixed bag. Some insurers interpret a roll cage as a sign the car is for racing, which they might not cover.

If it’s a minor half-cage or for street/show purposes, ensure it’s legal because full cages on street cars can be illegal unless it is engineered. Always check the policy and local road rules before adding safety-related mods.

Exterior and Body Mods

This category includes custom paint jobs, body kits, spoilers/wings, aftermarket lights such as LEDs or underglow neons, and window tints. These are usually cosmetic, but they can have legal limits (e.g. tint darkness, headlight colors). 

Insurers typically don’t mind cosmetic mods if they’re legal, for example, a custom paint or wrap is fine but remember it can raise the car’s value so you have to let your insurer know the new paint’s value. 

Some policies exclude custom paint or require it as a listed extra. Body kits and spoilers need to be secure and not sharp to meet safety standards. In addition to that, underbody neon lights are often not road-legal in many states except at shows.

Using them on the road could get you defected and then your insurance would back if you crashed while the car was in illegal condition. So use those mods within the bounds of the law. 

As for tints, ensure they are within the allowed VLT% (Visible Light Transmission) in your state, illegal dark tints are a common insurance no-no.

Interior & Other Mods

Swapping the interior for racing bucket seats, adding a huge subwoofer system, or other interior gadgetry? These usually affect insurance only by changing the car’s value or theft appeal. 

High-end audio systems should be declared so they’re covered, otherwise an insurer might only pay for the factory stereo if your car gets stolen. Moreover, aftermarket seats or steering wheels must comply with ADRs because removing airbags or installing non-compliant seats can make the car unroadworthy. 

For example, fitting a deep-dish sports steering wheel without an airbag in a car that came with one is illegal for road use and dangerous. As a result, that would void insurance because you’ve disabled a safety feature. 

So, any interior mod that affects safety should be approached cautiously and with proper approvals. Additional gadgets like roof racks, tow bars, or parking sensors are usually fine and often listed as acceptable mods by insurers, you just have to let them know so the items are included in your coverage.

As you can see, most modifications can be covered by insurance, as long as they’re legal and properly disclosed. While not every mod has to directly follow the Australian Design Rules (ADRs), it’s important to understand that ADRs set safety, emissions, and performance standards. These rules indirectly impact car insurance, because they influence how safe a vehicle is and that affects its risk level in the eyes of insurers.

That’s why it’s always best to stay within legal limits and your insurer’s comfort zone. Some upgrades are minor, while others are major, so you need to be careful with each one.

If you’re not sure how a modification will affect your insurance, contact your provider before you install it. It’s much better to hear “we won’t cover that” beforehand than to find out your coverage is void after something goes wrong.

How to Keep Your Mods from Messing Up Your Coverage

After reading all of this, you might feel like we’ve been repeating two key points over and over: follow the ADRs and keep your insurer informed. And honestly, that’s because they really are that important. But don’t worry, we’re not just here to warn you. We’ve also gathered some practical, easy-to-follow tips to help you enjoy your modded car while staying on your insurer’s good side.

Always Inform Your Insurer (Disclosure is Key)

The golden rule is no secrets especially to your insurer. The moment you plan a modification, check your policy documents (Product Disclosure Statement) and notify your insurer. Some insurers require pre-approval for certain modifications, meaning you need to tell them before you make the change to ensure it’s covered. 

Even if pre-approval isn’t explicitly needed, you should update your policy once the mod is done. Provide details and receipts if possible. Getting everything officially noted prevents the nasty surprise of a denied claim later. 

Remember, undeclared mods can invalidate your policy due to non-disclosure. It’s not worth the risk. If your insurer doesn’t cover the mod, find out before you pour money into the upgrade so you can switch to another provider or add specialist coverage.

Use Legal, Quality Parts and Comply with Regulations

This point cannot be stressed enough: stick to Australian road-legal modifications. Ensure any part you install, especially premium car parts or imported gear meets Australian standards. 

Look for parts with proper certification or those sold by reputable Australian dealers who guarantee they’re street-legal. For instance, if you’re in Melbourne fitting a premium performance part, check if it has ADR compliance or is recommended by local car clubs as legal. 

Trusted suppliers lik Mars Performance specialise in premium car parts that meet Australian standards, making them a reliable choice for modders who want peace of mind.

Furthermore, if the mod is significant, get it certified by an engineer. Having an official certificate (such as a VSCCS in NSW or VASS in Victoria) proves your car is still safe and legal after the mods.

Not only does this keep you on the right side of the law, it also gives your insurer confidence that the vehicle modification is professionally vetted. Don’t cut corners by doing anything illegal or sketchy, it will surely bite you in an insurance claim or even in a random roadside inspection.

Choose the Right Insurance Policy or Provider

Not all insurance companies welcome modified cars. If you find your current insurer is very restrictive, consider switching to a specialist enthusiast insurer. Australia has insurers like Shannons, Enthusiast, Just Car (now integrated into AAMI), and others who cater to car lovers. 

They often allow a long list of mods, from engine swaps to custom paint, as long as they’re legal and disclosed. These policies might come with a higher premium or an additional excess for mods, but they are designed to cover your upgrades. 

For example, a specialty insurer might insure your turbocharged project car whereas a budget insurer would flat-out refuse. It’s worth paying a bit more for the peace of mind that all your modifications are covered. 

Do some shopping around, compare quotes for modified car insurance. Make sure to get agreed value coverage that accounts for the value of your modifications if possible (so you get reimbursed for the car including the mods if it’s written off). The right insurer will work with you to list every mod on the policy so there’s no doubt come claim time.

Document Everything and Keep Records

When you modify your car, you have to maintain a folder (digital or physical) with all related paperwork about car insurance. This includes receipts for parts, showing their cost and maybe that they’re legitimate brands, any engineer certificates or mod plate details, and even before-and-after photos of the installation if available. 

Having clear documentation helps in multiple ways. First, it helps you prove to the insurer the value of the mods. For instance, that premium coilover suspension kit you installed isn’t cheap, and with a receipt you can substantiate its value in a claim. 

Second, if there’s ever a dispute about whether a mod was legal or properly done, you have the evidence like the certificate that it was signed off by professionals. Some insurers might ask for proof of certification for certain mods, so you’ll be ready to provide it. 

Good records also help with resale value down the line, and they show that you, as an enthusiast, take the mods seriously, which can only help your credibility if an insurer is evaluating a claim.

Have Mods Professionally Installed (or at Least Done Right): 

A DIY spirit is part of car culture, but sometimes you must know your limits. From an insurance and safety perspective, a modification installed by a licensed mechanic or specialist workshop is often better. 

Some insurers even state that you’re more likely to get affordable coverage if mods are done by a professional rather than by yourself in the garage. Poorly installed parts can fail or cause accidents, which is bad news all around. 

For example, if your self-installed suspension collapses and causes a crash, an investigation might reveal faulty workmanship, potentially giving the insurer grounds to deny the claim due to negligence. 

So if you’re not completely confident, leave it to an expert. Use workshops that provide written reports or compliance certificates for the mods. This not only keeps the car safer, but provides reassurance to insurers and to you that the modification isn’t a ticking time bomb.

Know What to Avoid

We’re focusing on positive solutions, but it’s worth stating that some modifications are generally best avoided if you want hassle-free insurance. These include anything explicitly illegal and even street-legal mods that are known to cause insurance grief. 

For instance, extremely loud pod filters or screamer pipes, nitrous systems for road use, removing safety features, or converting the car into a track-spec vehicle with no regard for road laws, all high-risk choices. 

They might be fine for a race car that isn’t insured for the street, but on your road-registered car, they invite trouble. Instead, you can focus on balanced modifications. You can usually enhance your car in sensible ways like use a high-flow air filter inside the factory air box instead of an exposed pod filter; get a sports exhaust that’s street-legal dB-wise; install a mild tune rather than pushing the engine to its ragged edge. 

Through this way, you improve the car but stay within what insurers consider reasonable. Your ride remains both enjoyable and insurable.

Consult and Learn

If you’re new to car modding, take advantage of the community and resources. Ask fellow enthusiasts in Australia (forums, local car clubs, Facebook groups) about their experiences with insurance. 

Often, other modders can point you to which insurance companies were mod-friendly and which mods caused them headaches. There are also workshops in Melbourne and other cities that specialize in performance upgrades, they often know the regulatory requirements inside out. 

Don’t be afraid to consult them about a planned mod. For example, a performance shop might tell you “if you upgrade your turbo, you’ll need a bigger intercooler and also an engineer cert to stay legal, we can arrange that.” That kind of heads-up is invaluable. The more you learn before you mod, the fewer unpleasant surprises you’ll face with insurance or the law.

Following these steps will greatly reduce the likelihood of your insurance coverage being compromised by your modifications. Essentially, you want to make your insurer part of your mod journey and not just an adversary. Keep everything transparent and by-the-book.

Enjoy Your Mods Responsibly

Having a modified car in Australia is absolutely doable without losing insurance coverage, as long as you approach it responsibly. It comes down to a few core principles: stay legal, be upfront with your insurer, and invest in quality parts and workmanship. 

You must treat your insurance company as a stakeholder in your build and keep them in the loop on what’s changed and why. When you use premium car parts, especially those sourced from Melbourne’s trusted suppliers lik Mars Performance.

Make sure the aftermarket parts you are choosing are compliant and add real value to your car. Quality mods done right can even make your vehicle safer and more enjoyable to drive, and a good insurer will recognize that.

An informed car enthusiast can become successful in styling their car.. Use the tips we’ve provided to make informed decisions about your next upgrade. Whether it’s a simple set of wheels or an entire performance overhaul, approach it with knowledge and care.

If you are ready to upgrade with confidence after consulting with your insurance. You can confidently browse Mars Performance’s full range of premium aftermarket parts, from wheels, headlights, taillights, and exhausts to body kits, spoilers, and side steps—give your ride the performance, style, and compliance it deserves.

Mod smart. Mod safe. Mod insured. Mod with Mars Performance!