Covering the mods doesn't mean they deem them legal, they just acknowledge you have them it's up to you to ensure they confirm to the ADR's or the VSR's for the relevant state.
An example could be tint, I've told my insurance co I have it, they have never asked what grade but their product disclosure says modifications must be legal. If it was 20 grade I'm sure they would backflip on a claim as soon as they realize I can't prove it is legal.