to disclose extras and modifications fitted to your car|
interesting item popped up during the Moneybox programme on Radio 4 on Saturday
31st January 2009 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 by many policyholders.
Disclosure is a cornerstone of
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
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 MG enthusiasts do?
On buying an MG 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 MG, 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 added extras?
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
issues might arise for an MG enthusiast?|
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.
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.
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 .
alert provided by Nigel Melbert (31.1.09)
Webpage source: V8 Register website