Do you have to declare car mods for 3rd party insurance?
Discussion
In this thread about DPF removal the bit quoted by the OP suggests that failing to disclose modifications will result in your car automatically not being covered under insurance, though 3rd party damage has to be.
Surely that can't be right, can it?
The implication there is that you could buy yourself a 1 litre Micra, insure it 3rd party, drop a 500bhp supercharged V8 into it, unsurprisingly stuff it into a shop front when the standard brakes and suspension fail to cope with your new 200mph top speed, and because you only insured it third party, just walk away leaving the insurer to pick up the bill?
Surely that can't be right, can it?
The implication there is that you could buy yourself a 1 litre Micra, insure it 3rd party, drop a 500bhp supercharged V8 into it, unsurprisingly stuff it into a shop front when the standard brakes and suspension fail to cope with your new 200mph top speed, and because you only insured it third party, just walk away leaving the insurer to pick up the bill?
The insurer can NEVER get out of its responsibility to pay a Third Party if they have insured an Insurance Certificate even if they have insured a vehicle that was presented to them fraudulently, ie undeclared mods, re-badged etc etc.
What they can and will do however (and have done numerous times in the past) is where they can show those modifications contributed to the claim they can sue the policy holder for their losses, this has in the past cost a few people a lot of money.
What they can and will do however (and have done numerous times in the past) is where they can show those modifications contributed to the claim they can sue the policy holder for their losses, this has in the past cost a few people a lot of money.
dibblecorse said:
The insurer can NEVER get out of its responsibility to pay a Third Party if they have insured an Insurance Certificate even if they have insured a vehicle that was presented to them fraudulently, ie undeclared mods, re-badged etc etc.
What they can and will do however (and have done numerous times in the past) is where they can show those modifications contributed to the claim they can sue the policy holder for their losses, this has in the past cost a few people a lot of money.
Ah, good. I assumed I was missing something obvious, and that's the "something obvious"! What they can and will do however (and have done numerous times in the past) is where they can show those modifications contributed to the claim they can sue the policy holder for their losses, this has in the past cost a few people a lot of money.
dibblecorse said:
The insurer can NEVER get out of its responsibility to pay a Third Party if they have insured an Insurance Certificate even if they have insured a vehicle that was presented to them fraudulently, ie undeclared mods, re-badged etc etc.
What they can and will do however (and have done numerous times in the past) is where they can show those modifications contributed to the claim they can sue the policy holder for their losses, this has in the past cost a few people a lot of money.
Yes it can - if you don't provide accurate details to the insurance company then the policy is invalid and you are, in effect, driving without insurance. An insurance certificate is not proof of a valid policy.What they can and will do however (and have done numerous times in the past) is where they can show those modifications contributed to the claim they can sue the policy holder for their losses, this has in the past cost a few people a lot of money.
Monty Python said:
dibblecorse said:
The insurer can NEVER get out of its responsibility to pay a Third Party if they have insured an Insurance Certificate even if they have insured a vehicle that was presented to them fraudulently, ie undeclared mods, re-badged etc etc.
What they can and will do however (and have done numerous times in the past) is where they can show those modifications contributed to the claim they can sue the policy holder for their losses, this has in the past cost a few people a lot of money.
Yes it can - if you don't provide accurate details to the insurance company then the policy is invalid and you are, in effect, driving without insurance. An insurance certificate is not proof of a valid policy.What they can and will do however (and have done numerous times in the past) is where they can show those modifications contributed to the claim they can sue the policy holder for their losses, this has in the past cost a few people a lot of money.
My understanding is the an insurance certificate is not proof of valid insurance, but even on invalid insurance, the insurer concerned must settle any tp claim that arises. Although as dibblecourse says, as the policy is invalid, they can sue the policyholder for the outlay and the driver can be prosecuted for not having valid insurance.
I'm sure LoonR1 or Noger will confirm exact legal position.
TwigtheWonderkid said:
Monty,
My understanding is the an insurance certificate is not proof of valid insurance, but even on invalid insurance, the insurer concerned must settle any tp claim that arises. Although as dibblecourse says, as the policy is invalid, they can sue the policyholder for the outlay and the driver can be prosecuted for not having valid insurance.
I'm sure LoonR1 or Noger will confirm exact legal position.
http://www.legislation.gov.uk/ukpga/1988/52/section/151 is the relevant legislation.My understanding is the an insurance certificate is not proof of valid insurance, but even on invalid insurance, the insurer concerned must settle any tp claim that arises. Although as dibblecourse says, as the policy is invalid, they can sue the policyholder for the outlay and the driver can be prosecuted for not having valid insurance.
I'm sure LoonR1 or Noger will confirm exact legal position.
The basic law as it addresses third parties is s.148 of the Road Traffic Act 1988.
Basic third party insurance (the minimum required under s.145) cannot be voided as a result of any condition of the policy that addresses:
(2) (a)the age or physical or mental condition of persons driving the vehicle,
(b)the condition of the vehicle,
(c)the number of persons that the vehicle carries,
(d)the weight or physical characteristics of the goods that the vehicle carries,
(e)the time at which or the areas within which the vehicle is used,
(f)the horsepower or cylinder capacity or value of the vehicle,
(g)the carrying on the vehicle of any particular apparatus, or
(h)the carrying on the vehicle of any particular means of identification other than any means of identification required to be carried by or under [F1the Vehicle Excise and Registration Act 1994].
(3)Nothing in subsection (1) above requires an insurer or the giver of a security to pay any sum in respect of the liability of any person otherwise than in or towards the discharge of that liability.
(4) Any sum paid by an insurer or the giver of a security in or towards the discharge of any liability of any person which is covered by the policy or security by virtue only of subsection (1) above is recoverable by the insurer or giver of the security from that person.
So the example of a 5 litre V10 Micra would still be covered as against third parties, though anything paid out on the policy could be recovered from the policyholder (although that's of minimal help if they've just spent all their money on sticking a 5 litre V10 in a Micra). Note however that you could still be prosecuted for driving without insurance, because there is no policy in force that covers you for the risks, even if the insurer is forced to pay out.
Basic third party insurance (the minimum required under s.145) cannot be voided as a result of any condition of the policy that addresses:
(2) (a)the age or physical or mental condition of persons driving the vehicle,
(b)the condition of the vehicle,
(c)the number of persons that the vehicle carries,
(d)the weight or physical characteristics of the goods that the vehicle carries,
(e)the time at which or the areas within which the vehicle is used,
(f)the horsepower or cylinder capacity or value of the vehicle,
(g)the carrying on the vehicle of any particular apparatus, or
(h)the carrying on the vehicle of any particular means of identification other than any means of identification required to be carried by or under [F1the Vehicle Excise and Registration Act 1994].
(3)Nothing in subsection (1) above requires an insurer or the giver of a security to pay any sum in respect of the liability of any person otherwise than in or towards the discharge of that liability.
(4) Any sum paid by an insurer or the giver of a security in or towards the discharge of any liability of any person which is covered by the policy or security by virtue only of subsection (1) above is recoverable by the insurer or giver of the security from that person.
So the example of a 5 litre V10 Micra would still be covered as against third parties, though anything paid out on the policy could be recovered from the policyholder (although that's of minimal help if they've just spent all their money on sticking a 5 litre V10 in a Micra). Note however that you could still be prosecuted for driving without insurance, because there is no policy in force that covers you for the risks, even if the insurer is forced to pay out.
Presumably the insurance company would have to have agreed to insure the actual risk in the first place, rather than the fraudulent one?
In other words - if I went to a strict no modifications insurance company and told them I had a poverty spec Focus, which they were happy to insure, but was actually a WRC Focus with Cosworth engine - then the policy could never have been valid, and thus why should the insurance company have to honour third-party claims on it?
In other words - if I went to a strict no modifications insurance company and told them I had a poverty spec Focus, which they were happy to insure, but was actually a WRC Focus with Cosworth engine - then the policy could never have been valid, and thus why should the insurance company have to honour third-party claims on it?
Durzel said:
Presumably the insurance company would have to have agreed to insure the actual risk in the first place, rather than the fraudulent one?
In other words - if I went to a strict no modifications insurance company and told them I had a poverty spec Focus, which they were happy to insure, but was actually a WRC Focus with Cosworth engine - then the policy could never have been valid, and thus why should the insurance company have to honour third-party claims on it?
Because of the express statutory provision above.In other words - if I went to a strict no modifications insurance company and told them I had a poverty spec Focus, which they were happy to insure, but was actually a WRC Focus with Cosworth engine - then the policy could never have been valid, and thus why should the insurance company have to honour third-party claims on it?
CYMR0 said:
Because of the express statutory provision above.
Fair enough, you posted that while I was writing my post. 
Seems a little unfair on the insurance companies to have to pay out (even if they are entitled to recover through litigation - which isn't free) when they would never have insured the risk in the first place.Durzel said:
Fair enough, you posted that while I was writing my post. Seems a little unfair on the insurance companies to have to pay out (even if they are entitled to recover through litigation - which isn't free) when they would never have insured the risk in the first place.
It's not that unfair though. Seems a little unfair on the insurance companies to have to pay out (even if they are entitled to recover through litigation - which isn't free) when they would never have insured the risk in the first place.Clearly, there is an incentive for idiots to do this (look at all the V6 Corsas on eBay that are a 1.2 on the logbook).
As they have no assets, at least not after their chavbox has been smashed, there is little reason for them to think that they are more afraid of being sued by their victims than they are of being sued by their insurance company.
As an innocent driver, my best case scenario is that I make a fault claim on my comprehensive policy. As an innocent pedestrian, it's extremely hard for me to protect against the risk.
However, insurance companies have a raft of claims data that lets them assess the risk of a claim like this occurring (it's not huge) and allocating that risk as efficiently as they can between their policyholders. There's a very good chance indeed that my Mum's 1.6 Focus doesn't have the heart of a Mustang, but the slightly greater risk can be priced in when a 22-year-old mechanic insures his base spec Corsa.
No single insurance company is placed at a disadvantage relative to others as they can set their own premiums, even if they find 22-year-old mechanics to be a profitable pool of business. Low risk drivers pay very little extra and although I don't have statistics, even high risk drivers probably won't pay much of their premium to cover this risk. Insurers also don't waste time contesting claims which further increases economic efficiency, and innocent victims are paid out sooner.
In any event, if this provision wasn't in place, the MIB would probably step in more often and this would mean that insurers could write business for drivers at high risk of undeclared mods more cheaply than the actual risk, pocketing the premiums and refusing to pay out.
The issue is lets say you buy a cheap old car, teh seller mutters something about an engine problem resulting in a change but the new engine was a 1.6 rather than a 1.4 assuming they look visually similar, or on a classic a previous owner had had the cylinders bored out reulting in a larger capacity and more power, in those cases the owner may have legitimatley believed the information they had given was correct.
Engineer1 said:
The issue is lets say you buy a cheap old car, teh seller mutters something about an engine problem resulting in a change but the new engine was a 1.6 rather than a 1.4 assuming they look visually similar, or on a classic a previous owner had had the cylinders bored out reulting in a larger capacity and more power, in those cases the owner may have legitimatley believed the information they had given was correct.
When you give the information to your insurance company, you do so to the best of your knowledge. As long as you do that you're fine. If something turns out to be incorrect, if you answered to the best of your knowledge, and the thing you got wrong wasn't reasonable for you to know, you won't have an issue. This topic is a minefield. Generally speaking the insurer will void or reduce any payment for the damage to the modified car. In regards to the TP element then they are normally liable to pay out and retain rights to recover from the policyholder if they deal with the claim in a specific way.
It's rarely economically viable to follow this process. However sometimes it is. See the recent case of Anne Bissmire vs Diamond Insurance. In these cases the policy is canceled ab initio (from the start) and it never existed in a legal a sense. As such the payout and claim for the TP falls to the MIB.
It's rarely economically viable to follow this process. However sometimes it is. See the recent case of Anne Bissmire vs Diamond Insurance. In these cases the policy is canceled ab initio (from the start) and it never existed in a legal a sense. As such the payout and claim for the TP falls to the MIB.
TwigtheWonderkid said:
Engineer1 said:
The issue is lets say you buy a cheap old car, teh seller mutters something about an engine problem resulting in a change but the new engine was a 1.6 rather than a 1.4 assuming they look visually similar, or on a classic a previous owner had had the cylinders bored out reulting in a larger capacity and more power, in those cases the owner may have legitimatley believed the information they had given was correct.
When you give the information to your insurance company, you do so to the best of your knowledge. As long as you do that you're fine. If something turns out to be incorrect, if you answered to the best of your knowledge, and the thing you got wrong wasn't reasonable for you to know, you won't have an issue. 
I had this years ago, well similar anyway.
I brought a 1.1 Polo, taxed & insured it etc. A few weeks later I got a letter off the DVLA saying I'd taxed it wrong because it's a 1.3. A bit of investigation later & as the DVLA were correct I told the insurance company, paid the difference & that was it.
I was under the impression that the insurer could only void the policy if they had been "induced" to accept that risk.
If you have a highly modified car with 3 pages of mods declared then the fact that you missed the silicone engine hose kit or that you painted the brake calipers green at the weekend would not be reason for the insurer to cancel the policy is that the case?
If you have a highly modified car with 3 pages of mods declared then the fact that you missed the silicone engine hose kit or that you painted the brake calipers green at the weekend would not be reason for the insurer to cancel the policy is that the case?
nikaiyo2 said:
I was under the impression that the insurer could only void the policy if they had been "induced" to accept that risk.
If you have a highly modified car with 3 pages of mods declared then the fact that you missed the silicone engine hose kit or that you painted the brake calipers green at the weekend would not be reason for the insurer to cancel the policy is that the case?
I think they can't cancel the policy for not being told about something that had they known, would have made no different to their underwriting of the risk anyway.If you have a highly modified car with 3 pages of mods declared then the fact that you missed the silicone engine hose kit or that you painted the brake calipers green at the weekend would not be reason for the insurer to cancel the policy is that the case?
If they would have charged extra or not covered you at all, then I think they can cancel. But only if you've mislead them. If you didn't know and get answers in good faith, then I think you're fine.
If you Induce an insurer to cover a risk that they would not have covered had you been truthful then they can cancel the policy.
There are a million scenarios here and each one will require a specific answer there is no one size fits all answer.
Is anyone else struggling to access this thread directly. I have to go via previous posters answers otherwise it says invalid address.
There are a million scenarios here and each one will require a specific answer there is no one size fits all answer.
Is anyone else struggling to access this thread directly. I have to go via previous posters answers otherwise it says invalid address.
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