Having been a loss adjuster I thought I might throw in my tuppence worth. The Insurance Ombudsman, that was, (the current Financial Ombudsman takes the same view) is quite clear as to what is a modification. If you a buy a "standard car" chosing from the "standard" list of options that is not modifying a vehicle. the Ombudsman' s view, the use of the word ' modified' could well be taken to mean fundamental changes to the original performance specification, with emphasis on ' fundamental' .
The following two cases come from the IOB
1. Addition to a body kit - whether vehicle had been ' modified'
Following the theft of the applicant' s Ford Orion Ghia the insurer advised him that it considered he had not made full disclosure regarding modifications to the vehicle. Spoilers, skirts, special road wheels and a special steering wheel had been added. The applicant asserted that the vehicle had been altered but not modified.
The specific question on the proposal form was ' has [the] vehicle been modified?' , to which he answered: ' No' . There was little doubt that the additions were the kind of feature which the insurer would have wished to know about, since they increased the risk of theft by making the car look more attractive. However, in the Ombudsman' s view, the use of the word ' modified' could well be taken to mean fundamental changes to the original performance specification, with emphasis on ' fundamental' .. Car accessory shops were full of items which car owners might place in or fix on to their vehicles, and the insurer accepted, for example, that if the only alteration made had been the painting of stripes down the side of the vehicle that would be a matter about which it need not know. It was not easy to say where the dividing line was to be drawn, but the point of the Statement of General Insurance Practice was that such questions were for insurers to make clear, and not for the public to judge.
It was considered that the body kit and other items fitted to the vehicle were merely accessories, or ' bolt-on' additions, and not fundamental modifications. Were the applicant to tell a friend that he was driving a modified Ford Orion, the friend might well visualise a vehicle which had been dramatically changed, perhaps by the fitting of a different engine. Possibly, the analogy of a car adapted for rallying had some relevance, but if all that was meant was that a body kit had been fitted, the word ' modified' might be overstating the changes. Certainly, the Ombudsman was not persuaded that the word ' modified' was sufficient to alert policyholders to the need to disclose alterations of the kind which had taken place here. Accordingly, whatever information the insurer might have wished to know, the applicant had in fact made proper disclosure on the proposal in response to the question which was actually asked of him.
BN (94) 2 p. 5
2. Carburettors
Replacement of single-choke carburettor with twin-choke carburettor - whether vehicle had been ' modified'
Following the theft of his car, the insurer avoided the applicant' s policy and repudiated his claim on the ground that his car had been fitted with a Weber twin-choke carburettor rather than the standard Ford Capri single-choke unit. It asserted that this was a modification which should have been disclosed when he proposed for the insurance, and answered the question about whether the vehicle had been ' modified' . The insurer confirmed that had its underwriters been made aware of the twin choke-carburettor the proposal would not have been accepted.
A twin-choke carburettor was not a high performance unit and appeared to be fitted regularly to Ford Capris because the standard single-choke until was ineffective and prone to failure. The replacement would only have had a slight effect on performance. Many vehicles would have replacement parts fitted because the original was unsatisfactory, and many such parts would be superior to the original and perhaps increased performance to a small degree. This did not necessarily mean that they should be regarded as modifications. If insurers wished to know about any replacement parts they should ask more specific questions on their proposal forms. These points were put to the insurer which agreed to meet the claim.
BN (94) 2 p. 6
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