Modification

Beware if your vehicle is modified as it may not be covered if it is stolen or damaged. Most, but by no means, all insurance companies will not insure a motor vehicle if it is modified, but some, will not even tell you what they mean by the term “modification”. Items which have been classed as modifications include: fat wheels (rims more than an unacceptable size) sports steering wheels, spoilers, body kits, modified exhaust systems, and even in some instances, high powered or expensive sound systems. The following case study had a happy ending.

Fred purchased his first motor vehicle from the Trading Post. Being a computer programmer, he knew little about cars and was unaware the vehicle had been lowered and had a modified exhaust system. When he insured the vehicle, he did not mention it had any modifications. However, two weeks later, being an inexperienced driver, he had his first accident, and the insurance company did not want to meet the claim after the assessor informed them it had been modified.

He said he did not know of the modifications, but the assessor responded by stating that a lowered vehicle would be obvious to anyone. Fred said it was not obvious to him and it was certainly not obvious to his girlfriend, or his girlfriend’s girlfriend. He therefore took advice from his girlfriend, who was a lawyer, he should claim protection from section 26 of the Insurance Contracts Act. This section states that if you tell an insurance company something which you believe to be true, although it was not, you will be deemed not to have made a misrepresentation at all assuming a reasonable person in the circumstances would have acted in the same manner.

This is always a difficult question to answer but, in the circumstances, the members of the Panel concluded Fred provided a reasonable explanation and found in his favour.