Anyone who hadn't declared mods ever been in a claims situation? Any trouble?

Strictly speaking any change from standard is a notifiable modification even a gear knob or stereo. (I was an car insurance advisor for 6ys). You may get away with some mods (like a chip) but if you injured someone and got caught out you may end up paying very large amounts out of your own pocket. And you may find that the insurance isn't as bad as you thought - I modified my Mini and it was actually cheaper with a specialist insurer than it was unmodified with a "high street" company.

No, I was just wondering from an insurance point of view. I work for a large insurer myself, and my girlfriend was insured by them at the time. The car got written off, and as it turned out there were mods which hadn't been declared as she had bought the car from someone who had played with it but thought she only had aftermarket alloys. She had changed the wheels back to standard Golf wheels but afterwards I realised that there were other mods (zorst, shocks etc) that weren't standard either but the co just paid out regardless.

I wonder whether this is just because the company was much larger and wasn't so fussy, and if smaller companies give you loads more hassle if you have to claim? (Close vehicle inspections, under the bonnet etc)

Sorry - I realise I sound like I'm trying to get people to admit to not declaring mods! No, I was just curious

I'm not in any way advocating non-declaration - I'd argue that if you don't declare, you may as not insure at all - but I do wonder, if you bought a car, were completely non-technical, and therefore didn't know it was modded (maybe even didn't know what a mod was!), what would happen if you had an accident and they discovered the mods on it?

I suppose ignorance is no defence - but then again, are you supposed to take ANY used vehicle to a specialist for him to check it thoroughly for mods? On a bike, for example, you could have a Dynojet kit fitted (on a bike with carbs) and you'd never know unless you took the top off the carbs - and how many people could/would do that?

Post deleted by Skodaman

Is ignorance exception from exclusion?

The legal principle is that ignorance of the law is no excuse for breaking it. I have minor mods as above (declared) and I wonder if the examiner would have found them if I'd not declared them and pranged the car..strut brace is obvios I suppose.

And if its anything like the last train crash there would be 20 different health & safety / incident reports on the one accident by the 20 different safety agencies involved..oh yes and this would be followed by a major tabloid running a 'ban all Fiat Coupes now campaign'.

Anyone know of examples when someone has been caught out for not declaring mods? In the press or anything...

As was said, wheels and such (or boost gauges) are obvious, but how would they know if you had a chip, uprated turbo, panel filter K&N etc??

I guess if they found a single mod they'd start sniffing further...

I've noticed that mods don't seem to add much to a policy... I'd love to see some of the heavily modded guys informing them, do you send a list in lol?

Think about how insurance companies work. If you were running an insurance company your dream would be to only insure people who never crashed, because they you could take in their premiums every year and never pay out a penny.

Unfortunately picking out the people who are never going to crash is surprisingly tricky, but the safest bets are people aged 30-65 who have 4+ years of NCB, who drive a standard, middle of the road car, travel less than 30k miles PA, have a detached house in a nice area, wash their car every Sunday, play golf, etc., etc.

The big companies go after those people and offer them low quotes.

The flip side of this is that they assume that anybody under 30 drives flat out everywhere, anybody with less than 5 years driving experience only got their licence by performing sexual services for their driving examiner, anybody over 70 is unable to see as far as the end of their bonnet and that anybody who modifies their car probably spends their whole weekend doing hand-brake turns in McDonald's car-park.

They price their policies accordingly, because what they're really saying is "P*ss off and let us get on with insuring somebody who isn't going to cost us millions in claims every year".

Smaller brokers, who can't compete as well on price for the ultra-safe drivers make their money by picking up on areas where the big companies have probably over-estimated the risk represented by some sectors.

So, basically, if you're anything other than a 37.5 year old, living in Surbiton and driving a silver Mondeo you'll be better off with a small company than a big one.

For example, every year I shop around for insurance on my wife's Honda Civic and, every year, Direct Line are the cheapest by miles. However, for my car, still with my wife and I driving, Direct Line are somewhere in the region of twice as expensive as Noel Dazley.

You should answer all questions on the proposal form to the best of your knowledge and belief.

You can't disclose information you are not aware of, especially when it would take someone who has a fair amount of knowledge to determine what mods you may have. If, for example, the car is chipped when you buy it and the seller tells you it is standard how is a normal person supposed to know?? Obviously, if you have a fiesta 1.0 ltr with 17" alloys then you may have difficulties running this argument.

If I was not aware I had a mod and therefore did not disclose it and then my insurance co relied on that non disclosure to decline a claim then I would feel fairly comfortable arguing the issue to Court - I say that as an insurance lawyer (for my sins).

Which company do you work for Andrew?

Not an insurance one, why?

Cos having read a few of your responses round and about I think you're on the button when it comes to marketing, legal etc. I reckon you'd go a long way as a consultant here

(You just have to sign a contract handing your soul over to eternal purgatory and you're in)

On a related note though, what level of "non-standard" is deemed acceptable? Putting any oil other than Selenia 20k is surely a modification? Running any other tyre than P-Zero etc?

I think we would have to put your excess up by £150 if you had anything other than Eagle F1's

Just for reference, here's the Ombudsman's current thinking on the treatment of 'Innocent non-disclosure' .....

"We occasionally receive cases where a policyholder has failed to disclose a material fact. Previously in such cases, where we were satisfied the policyholder did not intend to mislead the insurer, we have often adopted a ‘proportional’ approach. This has involved performing a calculation to compare the premium the policyholder actually paid with the correct premium (that is, the premium they would have paid had the insurer known the full facts), in order to ascertain what proportion of cover the customer should now receive. However, we are not entirely satisfied that this is an appropriate approach to take as a general rule.

The ABI (Association of British Insurers) Statement of General Insurance Practice requires firms not to repudiate a claim on the grounds:

1. of the customer’s failure to disclose a material fact, if that fact was one that a customer could not reasonably be expected to disclose; or

2. of misrepresentation, unless it is a deliberate or negligent misrepresentation of a material fact.

The same Statement also requires insurers:

1. to include clear questions on application forms about matters insurers have commonly found to be material; and

2. not to ask questions requiring knowledge which the signatory could not reasonably be expected to possess.

In accordance with these principles, if the customer’s non-disclosure has been totally innocent, we may, in some circumstances, expect an insurer to pay the full amount of cover, rather than a proportionate sum."

Futher definition of 'Innocent non-disclosure'...

Innocent Customers act in good faith if their non-disclosure is made innocently. This may happen because the question is unclear or ambiguous, or because the relevant information is not something that they should reasonably know. In these cases, the insurer will not be able to ‘avoid’ the contract and (subject to the policy terms and conditions) should pay the claim in full.

I was answering Rusper's query about ignorance of the law. Perhaps I should have been pedantic and stated that the general principle in law is that ignorance of the law (criminal or civil) is no defence for breaking it. Just because you are unaware that you dog howls all night when you are on night shift and wakes the neighbours doesn't absolve you from action by the council under nuisance legislation.

My job involves asset recovery for a large insurance brokerage and assigned contract recovery for a number of the main insurance companies. We tend to be rather strict on non-disclosure of material facts regardless of reasons. The policy is cancelled or claims unpaid with the onus on the policy holder to show that the omission was in good faith rather than done with intent. Granted this mostly occurs in the haulage, building, industrial sector which has a higher 'chancer/fraud' factor than Joe Public's Mondeo
but I can think of 2 current cases with private motor vehicles where the policy is frozen pending some explanations by the policy holder.

In this instance the insurance company pays its liability to the third party and my boys then have the job of recovering the settlement from the 'uninsured' policy holder.

We have an Insurance Ombudsman on this side of the water , same as you. However here he only becomes involved in matters of insurance cover and wording of the policy. For disputes and 'disclosures' etc he will decline to become involved and refer both parties to arbitration or the Courts. Either way its time consuming and expensive.

Fair enough.

The main part of my job is to analyse policy response for Insurers. Material non-disclosure can be difficult to establish and, as Ash points out, the Ombudsman is a useful tool. For example, the Ombudsman routinely forces insurers to pay claims where policy conditions have been breached but were not causative of the loss (e.g. door not locked - breach of condition - but burglar gains entrance through a window etc.).

If I can make a couple of practical suggestions to avoid any dispute occuring:

1) If you by a coop i'd suggest keeping a copy of the advert (or post) which details its specifications or any modifications made.

2) Don't be afraid to caveat some of your answers in the proposal form. e.g. where they ask about modifications you could say "I am aware of the following modifications .....)
The broker/insurer reviewing this is unlikely to call you up on this and it can be a valuable tool in the event there is a dispute about whether you knew about certain modifications... Also keep a copy of your proposal form.

Got a new one this morning, commercial vehicle repairer with a policy limit to 5 tonne GVW. Seems he does HGV work on the side which isn't covered on his policy. Large (unspecified) truck collapsed the hydraulic lift and injured a guy working underneath it. The lawyers will wallow.

Okay - how about this one...

An insurance policy is sold, and at no point in the quote process is it asked, or is it implied that modifications to the vehicle should be disclosed.

A customer takes up the quote and pays for it. At the point at which he receives your policy documentation, he reads the obligatory 'Material Facts' statement which states that you are obliged to disclose any information which may affect the policy (such as modifications).

By rights, is he entitled to call the company and declare his mods at that point, but then not be charged an extra premium as he has already been quoted a sum for the cover and has accepted this quote...?

Basic analogy:

A man walks into a shop, chooses a mobile phone. The assistant tells him the phone is £100. He buys the phone, but when reading the instructions, realises that he has been given a higher specification phone than he had expected. He calls the shop, and they realise their mistake. They ask him to pay an extra £30 as the phone they sold him was not the model they thought it was. However, he was sold the phone at a certain price, and the man argues that the shop does not have the right to charge him any more, which would be within his rights as I understand...

2 different points of law. The shop analogy is flawed in that the sale price offered is called 'an invitation to treat' ie the phone was offered at a price and both parties accepted a contract based on the offer price. Lucky punter. The shop would have a hard time getting more money from him.

The small print of most motor policies states that the car is 'standard and unmodified' usually by ticking the box on the proposal to confirm it is. Again if the punter knew his car was modified but didn't advise the insurance company then we are back to the 'Material Disclosure' issue again. In other words the initial insurance proposal presupposes that the car is 'Manufacturer standard' within a fairly narrow definition.

I checked with our call centre and part of the script for new motor proposals is a question asking whether the car has been modified in any way...I'm sure if dozy Doreen got cover for a Focus STI220 when it was a rotten old 1.8 then she would get a rebate..but not a particularly generous one and subject to 'admin charges..'