How do you insure a modified car in New Zealand?

Written by Henry Smith · Reviewed by Smiths Insurance & KiwiSaver, licensed Financial Advice Provider (FSP712931) · Updated 2026-10-07 · Reviewed quarterly, when the underlying data is restated.

General information, not advice on your situation. Buying through Tower's online quote is direct, without advice. QuoteHub is a Tower partner and Smiths Insurance & KiwiSaver may receive a commission from Tower.

Yes, you can insure a modified car in New Zealand, but cover reaches only the changes your insurer has been told about, agreed to and listed. Consumer Protection says to tell your insurer about modifications, and Tower's comprehensive wording shows what can go wrong if you don't: an unlisted modification can leave the whole car uncovered, not just the part. This guide, part of QuoteHub's car insurance section, uses Tower's published wording as a worked example. Other insurers set their own rules, so check the wording of any policy you are offered.

The short version

1. Write down every change from the factory specification, including the ones that feel minor, such as wheels or a wrap.
2. Ask the insurer to agree to each one and to list it on your certificate of insurance.
3. Read the certificate when it arrives. If a change is not on it, treat it as not covered.
4. Tell the insurer again whenever you change something later, and keep the invoice and a dated photo for each part.

What counts as a modification

Tower's wording defines modifications as changes, alterations or customisations to your car from the manufacturer's standard specifications. The list is "including but not limited to", so an item missing from it is a question for the insurer, not a safe assumption (Tower's comprehensive wording).

That is wider than many owners expect. A wrap or a set of aftermarket wheels is a modification in the same sense as an engine tune.

Why you must declare them

Two duties sit behind this. ICNZ says to disclose everything that may affect whether an insurer accepts you, whether or not a question is asked. And Tower's wording says every statement you make, in the application, during the policy and in a claim, must be honest, correct and complete (Tower's comprehensive wording).

The same wording says you must tell Tower immediately if anyone modifies your car from the manufacturer's standard specifications. That applies after the policy starts, not only when you apply. A set of coilovers fitted in the second month of the policy is as reportable as one fitted before you applied. The same list of immediate notifications includes a new regular driver and starting to use the car for business, such as delivering food or packages.

What an unlisted modification can do

How the three Tower cover levels treat a modified car is set out below.

The practical point is that the exclusion attaches to the car, not just to the part. How it interacts with liability cover on a given car is a question to put to the insurer in writing before you rely on it. Our guide to third party car insurance covers what that level is meant to do.

If you break your responsibilities, Tower can decline the claim and recover any payment already made. It can also cancel the policy or avoid it, which means treating it as if it had never been taken out from the date of the incorrect statement or breach (Tower's comprehensive wording). Tower's guide to what you need before insuring makes the same point about undeclared modifications.

What a claim on a listed modification looks like

Listing a change does not mean the insurer pays what you paid for it. Under Tower's comprehensive wording the optional benefit pays the least of the repair cost, the current value of the item or the accessories and modifications sum insured you chose, and only if Tower has accepted your claim for the car itself. Current value is the cost of repairing or replacing the item to a condition no better than new, less an allowance for depreciation (Tower's comprehensive wording).

A few consequences follow from the wording:

• Partial loss. Tower pays the least of the repair cost, the market value or the agreed value for the car, plus the current value of insured accessories and modifications up to the amount on your certificate.
• Total loss. Tower pays the agreed or market value of the car, whichever is on your certificate, and the current value of insured modifications up to their sum insured.
• Parts kept at home. Listed accessories are also covered while stored at home, so a part you have taken off the car and keep in the garage is not left out.
• Imported or custom parts. Tower pays for a part not currently available in New Zealand up to the lesser of the last known New Zealand price list or the closest New Zealand equivalent. It does not cover freight to import parts, or the cost of failing to match existing paint.

So the sum insured for the parts is a ceiling, not a promise, and an unlisted part has no ceiling at all. The car's own value basis is covered in our guide to comprehensive car insurance, and the steps after a loss are in our guide to car insurance claims.

Agreed value, market value and who drives

The last row matters in families where a younger driver shares a modified car. Our guide to car insurance for young drivers goes through the other trade-offs.

Price follows risk. ICNZ lists modified cars among those that cost more to insure, and our guide to what sets the price of car insurance goes through the other factors. The honest route to a lower price is a lower cover level or a bigger excess, not leaving a modification off the form, as the guide to paying less for car cover explains.

Racing, off-road use and the Warrant of Fitness

Modifications often arrive with a different way of using the car, and some uses are excluded whatever you have declared. Tower's comprehensive wording excludes loss, damage or liability from using the car for racing, which it defines to include sprinting, drag racing, hill climbing, rallying, time trials, speed tests and any form of motorsport or high speed driver training. It also excludes using the car off-road, such as on beaches, riverbeds and sand dunes (Tower's comprehensive wording).

So a declared roll cage or racing harness does not make track use insured. Listing the parts and being covered for the activity are separate questions.

Roadworthiness is the other one. Tower's wording requires the car to be kept at a standard where it would pass a Warrant of Fitness test by someone with the authority to do the test, other than you. The NZTA vehicle system page lists the Warrant of Fitness among the vehicle checks, and NZTA also has a page on modifying your vehicle for the rules that apply to the changes themselves. NZTA says some modifications may need low volume vehicle certification before the car can get a Warrant of Fitness, and a car that would not pass one breaches that policy responsibility. If a change needed certification, keep that paperwork with the installer's invoice.

Keeping your paperwork in order

The sources above do not say which paperwork an insurer wants for each change, so ask what yours needs. As a practical habit, keep the invoice, a dated photo and the installer's details for each part, and note the date it was fitted. If a claim is made, you can show what was on the car and when you told the insurer.

Getting a quote from Tower online

Have the car's registration number, the licence and claims history of each regular driver and a list of every modification to hand. QuoteHub's link opens Tower's online quote, Tower's own page, where you enter your details and see Tower's terms. Other insurers sell this cover too, so it is worth comparing how each treats the specific parts on your car. Our page on Tower car insurance explains Tower's cover levels.

Questions people ask

Do I have to tell my insurer about car modifications?

Yes. Consumer Protection says to tell your insurer about modifications, and Tower's wording requires you to tell it immediately if anyone modifies the car from the manufacturer's specification (Tower's comprehensive wording). That covers changes made after the policy started.

What happens if I don't declare a modification?

Under Tower's wording the car is not covered if it has an unlisted modification that differs from the manufacturer's specification, and loss, damage or liability arising from the modification is excluded. Tower can also decline the claim, recover a payment already made, and cancel or avoid the policy (Tower's comprehensive wording). Avoiding treats the policy as never taken out from the date of the breach.

Are wheels, wraps and paint classed as modifications?

In Tower's wording, yes. Its definition includes changes to tyres or wheels and exterior paint work including paint effects and wraps (Tower's comprehensive wording). Whether a given insurer accepts and lists them is for that insurer to confirm.

Can I insure a modified car with third party cover only?

It depends on the wording. In Tower's third party only wording a modified car is not covered unless Tower has agreed to the modification and noted it on the certificate (Tower's third party only wording). Ask any insurer in writing how it treats your specific changes.

Are my modifications covered if I only have comprehensive cover?

Not automatically. In Tower's comprehensive wording the modifications must be chosen under the optional benefit, agreed by Tower and listed on your certificate, and the benefit pays only if Tower accepts the claim for the car (Tower's comprehensive wording).

Is it compulsory to insure a modified car?

No more than any other car. Drive says car insurance in New Zealand is not a legal requirement, but it protects you from financial loss if you are in a crash or an event that damages your car or someone else's. Our guide to whether car insurance is compulsory covers the detail.

Does insuring at agreed value help with a modified car?

It can. Tower says agreed value is an amount you and the insurer agree on, that it carries higher premiums than market value, and that people with new cars or pricey modifications tend to choose it (Tower on agreed and market value). It does not replace listing the modifications, which is a separate step.

Cite this page QuoteHub NZ (2026). Modified Car Insurance NZ: What to Declare. www.quotehub.co.nz/car-insurance/modified-car-insurance-nz. Updated 2026-10-07.

References

• Consumer Protection: car insurance
• Drive: car ownership and insurance
• ICNZ: motor insurance
• ICNZ: tips to reduce your motor insurance premiums
• NZTA: how the vehicle system works
• NZTA: modifying your vehicle
• Tower: comprehensive wording
• Tower: third party, fire and theft wording
• Tower: third party only wording
• Tower: market value vs agreed value
• Tower: what you need before insuring your car

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