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Vehicle wraps and car insurance: what you need to know about modifying your car

Feb. 8, 2022
3 mins
A person installs a blue car wrap on a vehicle

Vehicle wraps — large vinyl graphics or decals that are applied to the painted surfaces of a car — can be installed for stylistic purposes as well as to protect paint from chipping over time. They can also be a cost-effective advertising solution. Many people use vehicle wraps as a way to turn their car into a mobile billboard for their business.

But if you’re thinking about putting a vinyl wrap on your car, you might want to consider how it will affect your insurance. While changing the colour of your vehicle doesn’t affect your rate, a car wrap can cost a lot of money and could therefore raise the value of your car — something that may influence your premium.

Do I have to notify my insurance provider if I want to install a car wrap?

“You should always declare a vehicle wrap to your insurer since it is a vehicle modification,” says Matthew Johnson, customer care manager at Sonnet Insurance. He explains that some insurance companies will not offer coverage for modified vehicles, while others may offer reduced coverage for the modified portions of the vehicle.

“It is important to contact your insurance provider to discuss the options before wrapping your vehicle.”

Johnson says that if you do not declare your vehicle wrap to your insurance company, any claims you make could be denied — or worse, your policy could be cancelled if your insurance provider finds out that your vehicle was modified and you didn’t tell them.

If you choose to wrap your vehicle, you will need to inform your provider of the value of the wrap, the materials used, and the date the installation took place. A detailed invoice from the installation company should be all you need.

Will a vehicle wrap affect my car insurance rate?

“Wrapping your vehicle can cause an increase in insurance premiums,” says Johnson. “Vehicles that are wrapped are more likely to be sought after for theft or vandalism.”

Seeing as a wrap can act as a protective layer, though, is there any chance it could lower your premium because it prevents paint from chipping? Johnson says likely not, since it is an additional modification to the vehicle.

“While it may result in fewer paint chips or small cosmetic damages, these damages would likely be under the deductible amount for a claim,” he says.

Additionally, if your vehicle is stolen and you make a claim, it might cost your insurance provider more to pay out if it is wrapped. For those reasons — and the fact that it’s a custom feature — a vehicle wrap is more likely to end up increasing your auto insurance rate.

Vehicle wraps for business purposes

Johnson says that if you are wrapping your vehicle for business purposes (advertising, company car, etc.) you need to make sure to disclose this to your insurance provider.

“Some companies do not offer coverage for business use on their vehicles, and if they offer some business use, they may not allow the vehicle to be wrapped for business purposes,” he says.

Similarly, if you’re wrapping your vehicle for business purposes, you’ll need business insurance rather than just personal insurance, which could result in an increased premium.

While a vehicle wrap covers and protects your paint from scratches and small dings, it’s a modification that could have an impact on your auto insurance rate. Speak to your insurance provider before installing a vehicle wrap to avoid any surprises in the event you have to make a claim.

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Caitlin McCormack

Caitlin McCormack is a writer based in Toronto. Her work has appeared in MSN, Food Network, HuffPost, What to Expect, Today's Parent, and Mashable, among others. When she isn't writing, she's busy chasing after her two sons, testing out new recipes, and working on her century-old fixer-upper.

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