The Basics of Modified Car Insurance in the Philippines

Some people modify their cars to express themselves or incorporate their desired aesthetics.  

Others do it to improve the functionality of their ride. Regardless, you may be wondering if a modified unit is covered by car insurance. 

The short answer is, it depends. Insurers have their own rules regarding car modifications. Keep on reading for a more detailed explanation:

First Things First: Are Car Modifications Legal?

The Land Transportation Office (LTO) allows you to modify your car provided that the changes fall within its parameters. The LTO defines motor vehicle modification as any physical change or alteration in the existing motor vehicle design like body configuration, engine displacement, etc.^[1] 

Before registering your modified vehicle, it needs to be inspected by the agency’s Motor Vehicle Inspection Center. The LTO also explains that all modified motor vehicles–whether brand new or in use–may be subject to reclassification and registration. Here are the guidelines: 

• The modifications involving the brake system, air conditioning system, steering wheel assembly, suspension and interior and exterior trimmings shall not be construed as a change in vehicle type classification.
• Modifications involving safety and the environment won’t be allowed. These include the following: axle modification, chassis modification, extended body/chassis, additional sidings of dump trucks, extended overhang, change in rim size, modification of handlebar and muffler, and reconfiguration of body dimension and design. 
• On top of the inspection report issued by the MVIC, the LTO requires a Certificate of Road Safety from the assemblers or manufacturers.
• All modified motor vehicles found to have violated the guidelines shall receive an “On Alarm” status and may not be registered. 

Can I Insure My Modified Car? 

That will still depend on your insurer. Standard car insurance policies do not provide coverage for certain car changes or upgrades. The best way to go about this is to read through the policy or ask your agent regarding the policy’s provisions. 

In some cases, car modifications can still get coverage as long as the owner informs the insurance company of the changes made to the car. However, take note that premiums may be much more expensive. That’s because modified cars are considered riskier to drive than the standard ones, or they may become targets of carnappers^[2] and burglars. 

In the event that the car modification is unauthorized, your insurance and warranty may become void, offering you no protection. As such, make sure that all the changes you make to your car are within the parameters of the LTO and your insurer. 

Read more: List of Car Insurance Add-Ons: What Coverage Do You Need?

How to Get Car Insurance for My Modified Car? 

Getting car insurance for your modified car is similar to getting a standard policy–but with a few added steps. Take note of the following: 

1. Make sure that the car modifications follow the regulations of the LTO. In case the modification warrants reclassification, you will need to re-register your car. 
2. Reach out to an insurance agent and ask about the coverage for car modifications. Be transparent and specify all the changes done to your car. Note that they may ask for documentation related to the modification like photos, videos, and receipts, among others. 
3. If you’re okay with the coverage, read the fine print then sign it. 
4. In case certain modifications aren’t covered, consider getting supplemental coverage. This add-on will cover a portion of the cost of modification. 
5. In case you’re collecting classic cars^[3] that have undergone several modifications, you may want to look into an insurance policy designed for collectables like vintage cars. Such a policy may include certain modifications in its coverage. 

Some Considerations Before Insuring Your Modified Car 

Modifications have a great impact on your insurance policy. Check out the following: 

• Insufficient protection – Typical policies don’t cover car modifications. If something happens to your modified car, you won’t be entitled to insurance benefits like repair and replacement. 

• Rejection or cancellation – If you don’t declare your car modifications while you’re applying for a policy, you won’t be covered in case you get into an accident. Remember, insurance companies investigate claims thoroughly, and they may discover that your car has undergone modification. In some cases, the car insurance may even cancel your policy, especially if the modifications are dangerous. 

• More expensive premium – As mentioned, you will need to pay more in case your insurer covers car modifications. This is because of the risks associated with the changes in the car’s engine, design, and even configuration. Getting add-ons or another insurance policy specializing in modifications can bump up your costs. 

Car Insurance Company	Maximum Total Sum Insured	CTPL Coverage	Own Damage & Theft Coverage	Acts of Nature Coverage	Death / Disablement Coverage
FPG Insurance	₱4 million	✔️	✔️	✔️
Malayan Insurance	₱7.5 million	✔️	✔️	✔️
The Mercantile Insurance Corporation	₱5 million		✔️	✔️
OONA Insurance (formerly MAPFRE)	₱5 million	✔️	✔️	✔️	✔️
PGA Insurance	₱3 million				✔️
SGI Philippines	₱5 million	✔️		✔️	✔️
Standard Insurance	₱5 million	✔️	✔️	✔️	✔️
Stronghold Insurance	₱3 million		✔️

 

Still Want to Modify Your Car? Here’s What to Take Note Of

If you decide to modify your car, it’s important that you weigh the pros and cons. Here are the top things you need to consider: 

• Car modification is expensive – Replacing parts, changing the paint color, modifying the interior–they don’t come cheap! Sometimes, you need to source the components abroad, which makes this pursuit more expensive. If you leave modification to specialists, you also have to factor in the labor costs. Add to that the money you need to put toward the insurance. 

• Car modification may take time – It requires intensive research and comprehensive planning to ensure that your money won’t go to waste. You’ll find yourself talking to different suppliers and mechanics. And the modification process itself may take weeks. 

• Car modification can lower your unit’s resale value – This means that you’ll get less money than what you’ve invested. Primarily, that’s because you’ll have fewer buyers since not everyone will be interested in the modifications you’ve done to your car. 

• Car modification may affect your vehicle’s safety – Altering certain components of your car may compromise its safety. As such, you should only get quality parts and work with a qualified and trusted mechanic. Above all, make sure that the modifications fall within the parameters of the LTO. 

Read more: Find the Coverage You Need: Top Car Insurance Companies

Final Thoughts

Car modification can transform your vehicle into something much better, nicer, and more powerful. But it’s not without its downsides, especially when it comes to insurance. It can increase your premium, as the modified car is considered riskier than the stock one. On top of that, you’ll have to cover the actual costs of modification, which don’t come cheap. 

Sources: 

• ^[1] LTO Department Order No. 2010-32
• ^[2] New Car Theft Modus Targets Teachers (GMA News Online, 2024)
• ^[3] The 30 Greatest Muscle Cars of All Time, Ranked (Robb Report, 2024)