Car modification pitfalls can leave owners thousands out of pocket – ombudsman

Car modifications such as alloy wheels or tinted windows can potentially leave drivers with big unexpected bills, an ombudsman is warning.

The Financial Ombudsman Service (FOS) said it is hearing from increasing numbers of vehicle owners who have been left to pay significant sums because they have unknowingly invalidated their car insurance.

Car modifications can range from body kits and custom paintwork to performance enhancements such as upgraded exhaust systems or engine tuning.

Whether motorists are changing alloy wheels for extra style or remapping the electronic control unit (ECU) for engine performance, not declaring modifications can have serious consequences, the service said.

It is seeing cases where a failure to declare modifications leads to insurance being invalidated or claims being rejected in the event of an accident.

Often drivers are not aware that modifications – even seemingly minor alterations such as tinted windows or stereo system enhancements – can lead to higher premiums because of the increased risk associated with those vehicles, the service said.

Rachel Lam, ombudsman director of insurance at the FOS, said: “For many people a car is their pride and joy, and it’s understandable that they may want to modify or personalise their vehicle.

“But these changes can have huge repercussions – increasing premiums, invalidating insurance or leaving unsuspecting car owners thousands of pounds worse off.

“It is crucial owners inform insurers of any modifications, even if they were made before the car was purchased.

“If people don’t feel they have been treated fairly by their insurer, they can come to our service, and we will investigate their complaint. Getting a fair answer is free and easy.”

FOS suggested that before making any modifications, motorists should review their policy and contact their insurer to clarify what needs to be declared.

If someone is purchasing a vehicle, they should ask questions and examine paperwork to understand if it has previously been modified.

People should always provide accurate information about any changes to their vehicle when applying or renewing insurance, the service said.

In one case, someone contacted the ombudsman after his motor insurer voided his policy and declined his claim following an accident.

When the insurer looked at the claim, they discovered the car had alloy wheels fitted that were three inches larger that the manufacturer’s standard size. The consumer claimed he did not know the wheels had been modified.

The ombudsman felt that an average consumer would not spot the difference in the new and standard tyres. For that reason, the service believed the consumer took reasonable care when applying for motor insurance. As a result, the insurer was ordered to reinstate the policy and take several other steps to put things right, including compensating the consumer for distress and inconvenience.

In another case, a consumer made a claim after an accident, only to have the policy voided when the insurer learned about an undeclared ECU remap and exhaust retuning.

The consumer argued that the modifications were already in place when he purchased the car. Despite this, the insurer produced evidence that he was aware of the modifications and had failed to disclose them. The ombudsman agreed that the insurer’s decision to void the policy was fair.

The service has also seen cases where the owner has disclosed modifications, but at the point of claim, discovered that the value of the modification is not covered, despite paying more for the insurance.

This backs up the importance of checking and reading all policy documents to understand what is covered by the insurer, the service said.