Insuring a Performance/Modified/Lifted or Lowered Vehicle in Canada, Ontario

Why should Ontarians worry about modifications to their car?

When signing up for car insurance, the insurer must have a basic understanding of what they are insuring. When you shake hands over a policy and don’t disclose any substantial mods, the insurance company may not pay out and may void the policy. Why is that? Performance mods, among others, are often seen as increased risk for the insurer. You may have a Civic, but if you double its horsepower and change its suspension behavior for better or worse, it is not what your insurer had in mind in the policy. We have to be especially careful here in Ontario as having slightly different rims and tire size/speed ratings may actually be enough for an adjuster to say no to your claim.

“Modified” Vehicles

Right off the bat  let me tell you if by modified we mean “performance modifications” then every insurance provider/broker in Ontario will say no and will not cover you aside from a few limiting or expensive alternatives discussed later. I’ve phoned numerous insurance providers long ago in the past asking if changing the intake to a short-ram intake was acceptable, they almost hung up on me as fast as I felt a cold shoulder. Certain insurance companies in Ontario have started taking pictures of the car within the first week of insurance after they provide temporary insurance slips. Bel-air appears to do this for some areas.  I’ve known people who tried Bel-Air who were mailed a certified letter, that stated the modifications in the pictures create a bigger liability for them and that the policy will be cancelled in X many days from reading that.

I try not to get frustrated here. They DO have a right to turn down who they do business with because of perceived risk. I can see why from their side, it must be much easier working with stock configurations. However, there ARE alternatives discussed later. Know that just about everyone, including those crazy LS1 Miata owners, have a right to car insurance.

What Exactly are my Limits?

Having a somewhat heavily modified car myself I’ve noticed that certain things do go unnoticed or ignored when fellow enthusiasts file claims. Going through with insurance could be a ticking bomb as not everyone gets caught, but if you do in the right circumstances you could be made completely liable for an expensive wreck. I believe it ultimately comes down to the extremity or visibility of the modifications having the biggest impact. Not every insurance provider is the same when it comes to certain modifications so always look around. Here are some general key points:

Vehicle Height – Unfortunately, this appears to be one of the worst things to do when undisclosed. Lowering or raising a vehicle is usually the last thing your insurance company wants to know. The reason for this is it may drastically change impact with the bumper at a different height. Very mild adjustments (1 inch) are likely* safe.
Exhaust – This one is still up there, but debatable. Being in the rust belt many people opt for FlowMaster aftermarket exhausts when theirs rots out. So long as it is not ‘visually extreme’ and looks OEM you may* be good.
Rims/Aftermarket Wheels – These are generally accepted by most insurers under the agreement that the rim and tire is the same circumference and width as your OEM wheels. Be sure to point this out when getting a policy as they have to adjust the policy so these are covered.
Aftermarket Audio  – Also generally accepted, so long as the mods are not over $5000. Be sure to point this out when getting a policy.
Body-kits – Same as above.
Engine – Anything added or adjusted here is a thumbs down. From engine swaps, to a different intake, you will not be insured.
Brakes – Slotted or drilled discs I am uncertain about. Caliper upgrades are a big no (yes, they may make your car safer, but it also changes performance)

*Notice the uncertainty. I’m not advocating to go through undisclosed. See why in next section.

Full Disclosure

When people first look into ‘upgrades’ or get turned down from Bel-Air, or have a preexisting policy I find that most keep quiet and continue with plans to lift/lower their ride or start with other modifications. There are many misconceptions I’ve seen online about those that promote this behavior. The biggest one being:

If you get into an at-fault accident in a modified vehicle, they still have to pay you (often with “just not for the aftermarket parts”)
They don’t have to pay you a penny if you violated the contract. When you signed that contract with them, there was likely a clause about disclosure on modifications that YOU agreed to. Having broken your side of the contract they can and will fight to get out of paying for a loss. I’d imagine that if something very serious happens such as personal injury to others, you’d want that policy behind you as they would be much more aggressive.

If I get into an accident in my car with undisclosed modifications, and I’m not at fault, I’m fine.
Again, not quite. When an adjuster comes out to view your car, they are not coming from the at-fault party but rather from your own insurer. If they see modifications they will be recorded and while you may get paid, expect repercussions from your own provider. The reasoning I believe for this was that it was easier for insurers to work with their own adjusters, and having modifications makes their job harder.

With that said, while hiding your modifications may work for some time, you absolutely do not want to get into a situation with your provider. If an accident, lets say, is bad enough to have them pursue you with lawyers, expect a long, expensive fight with odds against you. Having a policy being cancelled also flags you and may increase premiums across all providers.

Whats the worst that could happen?
You can be sued into the ground, and you can face criminal charges for fraud. Playing dumb, “I didn’t know the car/previous owner had that installed”, will not help much here. Don’t risk it.

It can get worse if you have to pay for damages to other vehicles, I wouldn’t even want to imagine the outcome of hospitalizing someone else with undisclosed modifications.

Alternatives

It is a rule that everyone must be able to obtain insurance in Ontario. Keep that in mind. While some providers or brokers may have turned you down they still must be able to provide you with something if you demand it. This will be through a special service, the Facility Association, that your insurer must be able to work through. A few big downsides:

• You are being paired with the worst insurable people to work out your premium (people with DUI’s, horrible claims records, high risk, etc)
• Going into this with a modified vehicle will require an reoccurring yearly appraisals (at minimum every few years).
• Providers will not want to work with you as it creates a headache for them (legally they must)
• OCPF 19. This is a big downside. The policy under Facility will waive the insurers right to have to pay the full value of the vehicle. “At their discretion they need only pay out what they consider to be the Actual Cash Value (ACV) of the car or the appraised value – whichever is less.” (link)
• Your mileage may vary but generally any changes you need to the policy will take longer, refunds (if storing the vehicle) are by cheque only and slow, and your provider may have errors in the policy if they’ve never done it before that could impact you.

Another option is Hagerty Insurance. You must qualify, and if you do you are VERY limited in what you can use your car for.

Final Notes

I am by no means an expert on this topic. This is what I have pieced together while talking to providers, and my time spent high-risk insured with Facility. I’d love to hear any feedback so this can be expanded on or corrected where needed. I can’t stress enough to stay away from modifications unless you are prepared to insure it correctly.  The only reason I go through Facility is for the fact that I have freedom with what I can do to my vehicle and peace of mind at the cost of extra work and higher premiums.