Modified car insurance: Premiums and claims can be affected

Vehicle modifications can affect insurance premiums, coverage and claims depending on the changes made. — Picture courtesy of BJAK

First Published: Tuesday, 29 Sep 2026 9:20 AM MYT

KUALA LUMPUR, Sept 29 — Vehicle modifications are back in focus after the Road Transport Department (JPJ) seized 37 vehicles with extreme modifications during Ops Ekstrem in Kuala Lumpur earlier this month. The same operation also recorded 57 offences involving vehicles without insurance coverage.

Sport rims, lowered suspension, body kits and performance upgrades can change more than how a car looks or drives. Modified car insurance premiums, coverage and claims can also be affected, depending on how those changes alter a vehicle’s value, performance and risk.

Modified car insurance refers to motor insurance covering a vehicle that has been altered from its original specifications. Changes involving engines, turbochargers, suspension, performance components or high-value wheels may increase a vehicle’s value or repair cost and should be disclosed to the insurer where relevant.

The General Insurance Association of Malaysia (PIAM) advises vehicle owners to inform their insurer of modifications. According to PIAM, modifications that increase accident risk may result in higher premiums or, in some cases, coverage not being offered.

Disclosure can also affect claims. PIAM states that if a modification was not disclosed and an accident occurs because of that modification, the insurer may have grounds to reject liability under the policy.

Not every modification carries the same insurance impact. Cosmetic changes may be assessed differently from engine or performance modifications. Aftermarket components such as custom rims, body kits or performance parts may also cost more to replace after an accident, with coverage subject to policy terms, limits and exclusions.

Before renewing car insurance, motorists should review their coverage and compare premiums, sum insured and available benefits, particularly if the vehicle has been modified since the previous policy.

“A modification may look like a simple upgrade to the owner, but from an insurance perspective it can change the value, repair cost and risk of the vehicle. Motorists should understand how a modification affects their coverage before an accident happens, not when they are making a claim,” said Ronald Lim, Chief Executive Officer of BJAK.

Through BJAK, motorists can compare car insurance and takaful options from up to 16 participating providers, including premiums, sum insured and available benefits. Terms for modified vehicles may differ depending on the provider and policy.

BJAK encourages motorists to disclose relevant modifications, check whether aftermarket components are adequately covered and compare insurance options before renewing their policy.