to disclose extras and modifications fitted to your car
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 the claim.
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:
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
Have you had an insurance
claim refused due to modifications to your car? Do you think insurers need to
be told about added extras?
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 disclosure.
to the Moneybox programme 31.1.09
alert provided by Nigel Melbert 090131
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.
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 .