• Sun. Feb 25th, 2024

UNDECLARED CAR MODIFICATIONS RESPONSIBLE FOR HIGHEST NUMBER OF REJECTED INSURANCE CLAIMS

ByAdam Myles

Oct 2, 2023
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 UNDECLARED CAR MODIFICATIONS RESPONSIBLE FOR HIGHEST NUMBER OF REJECTED INSURANCE CLAIMS 

  • One in six (16%) car insurance claims rejected because of unnotified vehicle modifications
  • Common reasons for claim rejections include parking in locations not listed on the policy (15%), and misrepresenting who is the main driver (fronting) (14%)
  • One in eight (12%) drivers experienced a claim refusal, rising to one in three (33%) within the 18-34 age bracket
  • Over two-fifths (44%) of Brits with a rejected claim stayed with their provider at renewal but amended their policy
  • More than one in five (22%) motorists wrongly believe ingesting Cannabidiol (CBD) oil before driving will invalidate any insurance claim
  • Claims could be rejected following an accident if drivers were speeding – which almost half of UK drivers (46%) admit to doing

Undeclared car modifications are the primary cause of disallowed car insurance claims in the UK, according to new research by Forbes Advisor. The price comparison and financial guidance website found that a sixth of drivers who have made a claim (16%) have been partially or fully declined for failing to declare modifications on their vehicle, such as window tints or rear spoilers.

The study analyses the number of rejected car insurance claims in the UK, including the leading causes for claim dismissal. The data also revealed what actions Brits took following a rejection, as well as common beliefs about behaviours on the road that could land drivers in hot water if making a claim.

The second-most common reason for a rejected claim was parking in a location at a certain time (15%), such as a driveway overnight, after specifying the car would be in a garage. Rounding out the top three reasons are fronting – when a more experienced driver lies about being the main driver on a policy – and using a car for business purposes on a social/domestic-only policy (14% each).

Top Five Causes Of Car Insurance Claims Rejections In Britain, Ranked By %
Rank Reasoning Provided % Of Brits
1 Failing to update an insurer on car modifications 16%
2 Parking in a non-specified location 15%
3= Fronting 14%
3= Using a car for business purposes despite a social/domestic-only policy 14%
5= Driving too fast or too slow 13%
5= Obstructed windows 13%

Source: Forbes Advisor UK

One in eight (12%) UK motorists were obliged to fund vehicle repairs or pay for a replacement after their claim was partially or fully denied by their insurer – rising to 33% among 18-34s when broken down by age. This could be due to younger drivers ‘pimping their ride’ with modifications but failing to tell their insurer that they have done so.

The data shows significant variation in Brits’ next steps after they’ve had a claim invalidated. Over two-fifths (44%) opted to stay with their insurance provider on a policy which provides a greater level of cover following the claim refusal. A further three in 10 (30%) stayed with the same provider under the same policy. Less commonly, UK motorists elected to change providers (18%), or suffered a policy cancellation by the insurer (8%).

When it comes to what British drivers believe voids a car insurance claim, there are a number of misconceptions. Texting when stuck in traffic (40%) and ingesting Cannabidiol (CBD) oil before driving (22%) feature in the top behaviours believed to invalidate claims. CBD is an active ingredient in cannabis, derived from hemp, but it does not cause a high[3]. Although using your phone while driving is illegal, it may not necessarily invalidate your policy[4].

When it comes to driving behaviour that could put your coverage in jeopardy should you need to make a claim following an accident, speeding tops the list (if speeding is adjudged to be a contributory factor in an accident and you are deemed liable, your insurer may restrict any claims payout to third party damages, even if you have a comprehensive policy)

Brits were coy in owning up to the act, as less than half (46%) admitted to going over the limit. But, breaking the responses down by area, Brighton (66%), Sheffield (63%), and Plymouth (61%) were more honest in their admissions.

Eating or drinking while driving (38%), failing to indicate (33%), blaring loud music (32%) were other bad habits that Brits were willing to disclose.

Kevin Pratt, car insurance expert at Forbes Advisor, says:

“Car insurance policies are tightly-written legal contracts with obligations on both sides. If you modify your car in any way – fitting tinted windows could be enough – then there’s a chance your claim on the policy could be rejected. If you do make a change to your car’s spec, it’s important to tell your insurer immediately – don’t wait until renewal.

“That said, if you think your claim has been unfairly rejected and your insurer refuses to budge, you should consider contacting the Financial Ombudsman Service, which will rule on the matter.

“With car insurance prices rocketing at the moment, it’s a good idea for everyone to test the market at renewal by running a quote comparison. If you’ve recently had a claim rejected, it’s doubly worthwhile running a comparison to make sure you’re getting the best deal.”