to disclose extras and modifications fitted to your car
An interesting item popped up during the Moneybox programme
on Radio 4 on Saturday 31st January concerning an insurer's reluctance
to pay out a claim following extensive vandalism of a car fitted
with many extras not disclosed by the insured to the insurer. It's
a topic we have touched on many times before but sadly the duty
of disclosure as a cornerstone of the insurance industry is not
well understood or observed.
Disclosure is a cornerstone of insurance
In order to assess the insurance risks the insurer needs the facts
so they can be assessed in order to determine the insurance premium
for the risk and any conditions to be attached to the policy. The
main risks are the driver, the intended use of the car (business,
social and domestic or limited mileage), the home location where
the car is kept, the car and any modifications. The conditions from
the insurer might, for example, be a requirement the car is garaged
overnight or fitted with an alarm or a first loss or they might
impose an excess clause.
Clearly if the insured fails to make proper disclosure of all
material facts that might have a bearing on the insurer's willingness
to take the risk and the terms offered for cover, then the risk
the insurer is carrying could be materially different to that disclosed
by the insured. If material non-disclosure is discovered, particularly
on processing a claim where a vehicle assessor inspects the car,
the insurer is entitled to void the policy and refuse to pay out
What is "material" so far as disclosure is concerned?
The indication of what insurers might regard as "material"
requiring disclosure were mentioned during the Moneybox programme
to be modifications, extras and improvements that involve any:
The comment was
made that a purchaser of a secondhand car might be unaware that
the car had been modified at an earlier time, particularly engine
modifications, but other modifications which any new owner of a
car should reasonably be expected to be able to see would be regarded
as material requiring disclosure.
susceptibility to theft of or from the car
What should V8 members do?
On buying an MGV8 it is essential the buyer asks the seller "are
there any modifications or extras fitted to the car?" If
there are modifications which could be considered material under
any of the categories above, then it is worth noting on the receipt
you obtain from the seller that "there are no modifications
to the car other than those modifications disclosed by the Seller
and are noted on this receipt". On insuring or renewing your
insurance of your MGV8, full disclosure of all material facts is
both necessary and prudent.
you had an insurance claim refused due to modifications
to your car? Do you think insurers need to be told about
The case reported on Moneybox programme involved a motorist
from Leicester who had bought a car he had wanted for
some time, a BMW convertible with a number of features
including red leather seats and a satnav with TV functions.
He took out fully comprehensive motor insurance cover.
Later his car suffered extensive vandalism with the damage
amounting to £5,000. When the insurer's engineer
came to inspect the car and assess the damage he noted
"there were things on the car the owner had not told
the insurer about" - in fact a considerable number
of extras and modifications to the car.
The owner of the car responded he did not know they were
extras and in some cases they were in fact factory fitted
extras to the car when new. After some discussion of the
claim and the insurer's nondisclosure concerns, a compromise
was agreed with the insured motorist whereby the insurer
agreed to pay the claim provided the insured paid the
additional premium that would have been required at the
inception of the policy had the insurer known of the nature
and value of the extras and modifications by way of full
to the Moneybox programme 31.1.09
alert provided by Nigel Melbert (31.1.09)
issues might arise for an MGV8 enthusiast?
There are two areas of concern: those modifications or
extras which members fit to improve the car (including
improvements to the engine performance or the handling)
and those modified parts that are fitted in the ordinary
course of maintenance simply because original parts are
no longer available.
Extras fitted to improve the car could include
retrofitted power assisted steering, a castor reduction
kit, alternative engine cooling fans or systems, rechipped
engine management system, satnav and fitted mobile phone
kits, a windstop, upgraded replacement shock absorbers,
upgraded brake pads and the use of silicone brake fluid
for example. Clearly some of those do have a direct bearing
on safety critical components or systems.
Substitute parts are often fitted which do not
come from the original supplier - for example replacement
tyres for the Goodyear Grand Prixs originally fitted to
an MGBGTV8 are no longer available (thank goodness many
will say) and similarly replacement rear and front springs
(in variable quality so reports say) and shock absorbers
come from a variety of sources .