Many motorists make changes to their cars. Most of these changes do not bother auto insurers and it is not necessary to tell them. Changes in interior decoration or audio system are not really important unless they cost you a lot and you like to insure them for possible losses explicitly. Remember auto insurers do not usually cover any portable item or equipment.
A material change is the one that will affect performance of the automobile, increase possible damages to other vehicles and passengers in case of crashes or reduce the protection provided by the original auto. In short, anything that will increase the risks accepted by the insurer in the first place. Changing the seat covers, floor mats, stereo and likes are not considered to be material.
Installing a brand new and especially larger engine, adding or taking away auto body parts, and modifying suspension, tires and exhaust are some of the material changes. There are people who redesign the whole car with new and modified parts. For example, they use the main body of a vehicle and change all the other parts including doors and exterior body with lighter material like fiberglass.
Then, they install a sports car engine to this lighter body to make the car go even faster. You can straightaway see a few serious problems with it. First of all, it is now a sports car regardless of how it looks. In fact it may need to be re-inspected by auto licensing authorities for safety and new license plate to be issued for it.
The second serious problem is that while taking out the heavy parts the safety features like airbags and seat belts can be disturb or taken out that makes the automobile less safer. Now, it is lighter, faster and more harmful to the driver and passengers. This may be exactly what the owner was aiming to achieve but this is not the car that has been insured in the first place.
The reason we have given an extreme example is to demonstrate how the insurance contract would have been broken with such changes and make policy null and void. In other words, you have a very little chance of any damages being paid should you fail to inform the insurer before starting to drive such automobile.
If you were to make similar changes as our example some insurers may refuse to carry on the cover when you tell them what you did to the car. This will force you to find alternative insurer. That is why it is important to discuss possible changes you are planning on doing. This will allow you to make alternative arrangements in time and find the best way of insuring after modifications.
Unfortunately the losses would be double should you neglect to tell the insurer in time and pay whatever additional premium required. By arranging an appropriate new policy or make changes to existing one you make sure two things. First of all you make sure that damages to original car will be paid. Secondly, your new investment on the car will be protected.
All those extras, changes and parts costs money and this requires you to arrange a higher valuation for your automobile based on the new look. You can do this in two ways. Either you could agree a valuation for the end product (the modified car) or add extra coverage for the parts installed as an endorsement.
What you have in mind may be much simpler and you may not have to pay a lot extra in terms of premiums. So, talk to your insurer so that both parties are clear on where they stand.