The importance of declaring modifications to your car insurance provider in the Philippines

CTPL coverage insurance is mandatory here in the Philippines, as it provides protection for both the driver and the third party in the event of an accident. However, many drivers fail to realize that any modifications made to their vehicle must be declared to their insurance provider. This is because modifications can significantly impact the risk profile of a vehicle, which can affect the cost of insurance premiums and the coverage provided.

This article will discuss the importance of declaring modifications to your car insurance provider and the potential consequences of failing to do so.

The main reason for declaring modifications is to ensure that your insurance policy accurately reflects the risk profile of your vehicle. This is because modifications can impact your car's safety, handling, and performance. For example, if you modify your engine to increase its horsepower, your car may become faster, but it may also become less stable and more difficult to control. This increases the risk of accidents, which means that the cost of insurance premiums may go up to reflect the increased risk.

Additionally, if you are involved in an accident, and your insurance provider finds out that you had modifications that were not declared, they may refuse to pay out your claim. This is because you have violated the terms of your policy by not disclosing all relevant information about your vehicle. This can lead to significant financial losses, mainly if you are found to be at fault for the accident and are liable for damages. Not only that, but you could also potentially have a harder time in making claims and applying for future insurance coverage as well.

Supplemental coverage is an insurance policy add-on that will cover part of the cost of replacing the modifications done to your vehicle. Depending on the company, they will typically issue a price cap for these modifications and will not cover the entire cost of them. Typically this insurance coverage will only cover approximately up to 10 percent of the value of the modifications and not its entire cost. While it may add a bit to your policy, it's better than nothing rather than a total loss to your modifications should something happen; that's why it's still a good investment, regardless if the insurance company will only cover up to 10 percent. However, should you have a great relationship with your insurance company and are considered a valued client, the insurance provider could cover a more significant percentage of the modification cost, but of course, that is still up to the discretion of the provider.

Should you want a more specialized form of insurance, you should look for providers that specialize in insuring collectible/classic automobiles, which may include modified vehicles as well. However, this is very sparse, especially in the Philippines where the market is much more limited.

When making modifications to your vehicle, it is essential to contact your insurance provider and declare the changes. This can usually be done over the phone, online, or through your trusted insurance agent, and the insurance provider will assess the impact of the modifications on your policy.

The insurance provider may ask for additional information about the modifications, such as the cost, the type of modification, and who carried out the work. They may also request photographs, documentation, and official receipts to verify the changes and to assess the value further.

Once the modifications have been declared, your insurance provider will update your policy to reflect the new risk profile of your vehicle. This may result in a change in the cost of insurance premiums, depending on the impact and cost of the modifications themselves.