What should a policyholder do if their vehicle is modified?

When a vehicle is modified, it is crucial for the policyholder to notify the insurer to ensure that coverage remains intact. Modifications can significantly affect the risk profile of the vehicle, potentially influencing both its value and the likelihood of claims. Insurance companies typically need to reassess coverage based on these changes to ascertain if the policyholder's current coverage adequately protects against the inherent risks associated with a modified vehicle.

Failing to inform the insurer about modifications could lead to complications in the event of a claim. The insurer might deny coverage or payment based on the modifications that were not disclosed, which can leave the policyholder vulnerable financially.

In contrast, leaving the vehicle as is may seem convenient but risks unintentional underinsurance, as the policy may not account for the changes made. Canceling the insurance policy would not be practical since the vehicle would be uninsured, and assuming automatic coverage for modifications poses a significant risk, as not all policies cover modifications unless explicitly stated. Thus, proactively notifying the insurer is essential for maintaining adequate protection.