Admiral & co do, and they also charge you extra for the privilege of not having your mods covered like for like
I'm with the insurers on this one. More people who mod their cars crash them, so it's fair that premiums should be increased. Personally I'd like to see car insurance state-run and then not for profit, so premiums should be significantly lower. Of course, that would then mean we'd be dealing with civil servants instead of claims advisors and I'm not sure I'd wish that on anyone!