Drivers urged to declare it or face their car insurance being cancelled

These modifications can invalidate their insurance policy.

The Hidden Dangers of Car Insurance Modifications

Car insurance modifications can have serious consequences for drivers who make them without realizing the implications. The Financial Ombudsman Service (FOS) has received numerous complaints from motorists who have been left to pay huge sums because they have unknowingly invalidated their car insurance policy.

What are Car Insurance Modifications? Car insurance modifications refer to any changes made to a vehicle that can affect its insurance policy. These modifications can include:

Changing alloy wheels for extra style

Remapping the electronic control unit (ECU) for engine performance

Installing aftermarket parts, such as performance exhaust systems or suspension upgrades

Altering the vehicle’s appearance, such as installing spoilers or body kits

Why Do Modifications Invalidate Insurance Policies? Modifications can invalidate insurance policies because they can alter the vehicle’s performance, handling, or safety features. For example, installing a performance exhaust system can increase the vehicle’s power output, but it can also increase the risk of a crash. Similarly, installing aftermarket parts can affect the vehicle’s weight distribution, which can impact its handling and stability.

Key points to consider:**

The Risks of Car Modifications

Car modifications can have significant consequences for car owners, particularly when it comes to insurance. Ombudsman Rachel Lam has highlighted the potential risks associated with modifications, emphasizing the importance of informing insurers about any changes made to the vehicle.

The Impact on Insurance Premiums

Increased premiums: Modifications can lead to higher insurance premiums, as insurers view the vehicle as a higher risk. Invalidating insurance: In some cases, modifications can invalidate insurance policies, leaving owners without coverage. Thousands of pounds worse off: Uninformed modifications can result in owners being thousands of pounds worse off, as they may not be aware of the potential consequences. ### The Importance of Disclosure*

The Importance of Disclosure

Ombudsman Rachel Lam stresses the importance of informing insurers about any modifications made to the vehicle. Failure to disclose modifications can lead to severe consequences, including increased premiums, invalidation of insurance policies, and financial losses.

The Consequences of Non-Disclosure

Financial losses: Non-disclosure of modifications can result in financial losses for owners, as they may not be aware of the potential consequences. Increased premiums: Failure to disclose modifications can lead to increased premiums, as insurers view the vehicle as a higher risk. ### The Benefits of Transparency

The Benefits of Transparency

Reduced risk: Informing insurers about modifications can reduce the risk of increased premiums, invalidation of insurance policies, and financial losses.

The Rise of Ghost-Brokers

The Financial Ombudsman Service (FOS) has reported a significant increase in complaints about ghost-brokers. These are individuals or companies that sell insurance products without being licensed to do so. The FOS has seen a sharp rise in complaints about ghost-brokers, with many drivers being misled into purchasing fake car insurance deals online. Key statistics: + 1,400 complaints about ghost-brokers in 2022 + 50% increase in complaints compared to 2021 + £1.4 million in compensation awarded to affected drivers

The Consequences of Ghost-Brokers

The consequences of ghost-brokers can be severe and unexpected. Drivers who purchase fake car insurance deals from unlicensed brokers may find themselves facing:

Financial loss: Drivers may be required to pay for insurance that does not provide adequate coverage, resulting in financial losses. Lack of protection: Drivers may not have access to the same level of protection as those who purchase insurance from licensed brokers. Difficulty in making a claim: Drivers who purchase fake insurance may find it difficult to make a claim, or may be denied coverage altogether. ## Fake Car Insurance Deals**

Fake Car Insurance Deals

The FOS has also warned drivers about fake car insurance deals circulating online.