Insuring a Modified Car in Ontario

Sun 14 June 2020 | tags: 2020

I hope you're all staying healthy and safe during these odd times. I'd like to share my adventures in insuring my modified Miata as I found it was hard to find good information on the process. I'm lucky to have had a friend go through a similar ordeal when he insured his modified car and his guidance was extremely helpful here.

This does not substitute for talking to your insurer and this information may not be accurate for your circumstances. This is a record of my experiences in hopes that some parts may be useful to you.

So you want to purchase and insure a modified car in Ontario?

Let's start with my personal definition of a modified car:

A car that has been modified to increase performance.

Performance being a blanket statement here. It could mean cornering, acceleration, ride height, anything. Most insurance companies will insure lightly modified cars; stuff like sway bars, stereos, lights. Of course, your mileage may vary depending on your circumstances and insurer/underwriter. Every single one has a different answer as to what kind of modifications (and associated risk) they will accept.

As a rule of thumb, the following will disqualify you from most Ontario insurance companies: Lowered suspensions Any engine modifications after the intake (cams, after market turbochargers or superchargers) Any exhaust modifications before the catalytic converter (exhaust manifolds) Custom paintwork * Non-OEM body work/modifications

In my case here, I have a lowered Miata. As soon as I said lowered, this cut my insurance options to two: Hagerty and Facility.

Finding Insurance

Hagerty

This is the usual choice for most car enthusiasts to insure their toys. Their rates are low as they cater to the classic car and modified car crowds. One of the drawbacks is that there can often be a lot of limitations on usage to get their low rates. Mileage and other users come to mind. Anecdotally, after being bought out by Aviva they have been more strict on modifications than in past years. After going though the application, I did end up getting rejected from coverage. That leaves the remaining option, Facility.

Facility

This is the catch-all insurer for Ontario. They will insure people that nobody else will insure. Think multiple DUIs, accidents, and so on. You'll need to find a broker/agent to go through them. I was lucky enough that my existing insurer was able to apply on my behalf for me which greatly simplified the process. The process was similar to any other provider I've been with except for the additional documentation for modifications.

When documenting your modifications, make sure that you have the receipts for them. These are essential to determining the value of modifications added to your vehicle. The value is based on the list price without tax or shipping. If you ordered from another country and didn't use Canadian dollars (CAD) for currency then you may convert back into CAD. Supporting receipts and documentation to show the exchange rate on the day you paid that will also help. You'll also need to have a value of the car when signing up so they can insure you in the right category. Price-wise, you will be paying a modest premium for their services. Just remember, if you're insured with someone and the modifications are not declared and sanctioned, there may be difficulties in case of a claim.

Appraisals

I ended up getting two appraisals for my Miata; One for MTO and one for Insurance. Anecdotally, the rules have changed as to who can give an appraisal for MTO (registration purposes). Only car dealerships and those accredited by the Ministry can. You'll need to get your car to a dealership in order for them to appraise it.

I also chose to get an insurance appraisal so that my insurance knows where the number I put comes from. In the event of an incident, they will be more likely to pay out based on the appraised value. I ended up using the services of Marc Racine of Pristine Appraisals He was very friendly, courteous and was able to answer all of my questions about the process. His report on my Miata was very detailed and gave me pointers on what to work on if I wanted to increase the value of the car.

Registration @ MTO

Once insurance is sorted, registration is like any other car. Go to MTO with your license, bill of sale, MTO appraisal, signed ownership, and proof of insurance, safety and you'll be set!

One thing to note for the future, if you're in a catch-22 where you need the appraisal to get insurance, insurance to get the registered fit ownership, and registered ownership to finalize the appraisal it is possible to break the cycle. I didn't know it at the time but it's possible to get a temporary permit even before you've registered the vehicle as yours in order to drive it around and get safety and appraisals done before registering it as your car.

If you forget, you'll be towing your car around a lot before you can get it on the road... Ask me how I know!