Drivers could risk having their car insurance invalidated if they do not declare that their car is equipped with a common feature that hundreds of thousands of vehicles have.
Car owners receive unclear information when purchasing coverage through comparison websites, and the popular feature is often hidden in fine print or part of a vaguely worded guide to what constitutes a modification when completing a quote. online.
The item in question is a tow bar.
While there is no exact figure for the number of cars in the UK that have one fitted, the Caravan and Motorhome Club’s million members (and the number of people who need to tow horseboxes and boats) suggests there are hundreds of thousands on the roads.
Auto Express said it had been contacted by a motorist who was left with a six-figure repair bill when his insurer refused to pay a claim and canceled his policy because he had not included his car’s tow bar as a “modification”. when it was running. a quote via comparison website Money Super Market.
There is now serious concern that vehicle owners across the country may unknowingly drive with invalid insurance if they have not declared this practical feature as a modification.
Auto Express warns drivers that their car insurance may be invalid if they do not declare that their car has a tow bar installed. Found that comparison websites don’t list a tow bar as a modification that could affect their policy.
“We were contacted by a desperate driver after his insurer, Allianz-owned Flow, canceled his policy following an accident on the grounds that he had not included his car’s tow bar as a modification when purchasing cover,” explains Chris Rosamond, Business Affairs. topical. the editor of Auto Express told us.
“Purchased Flow insurance through MoneySupermarket and selected the ‘unmodified’ option when requesting quotes because the website’s help link did not mention the tow bar as a modification.”
The price comparison site’s text in its pop-up help box in the modifications section of the online form says: ‘What does this (modification question) mean?
‘If you or a previous owner have made a change to the original manufacturer’s specifications, such as alloy wheels, air conditioning, bodywork, exhaust system or tinted windows, please add it here.
“If you’re not sure if your car has been modified, check its past history to find out.”
Auto Express found that rival insurance comparison websites’ guidance on what constitutes a modification is similarly vague.
Others simply stated that “modifications are changes to the car’s original specifications” and can be “mechanical or cosmetic changes inside or outside the car.”
It is unclear how many cars in the UK have a tow bar fitted, although it is likely to be hundreds of thousands.
Rosamond says some comparison websites do not provide easy or obvious routes to information about whether a tow bar is a relevant modification to a car’s original specifications.
Furthermore, he warns that there is no obvious link to information about the potentially devastating consequences of failing to comply with the requirement to notify insurers about something as simple as fitting one.
“The driver who contacted us told us he was “desperate” and added that, after a routine vehicle collision, his insurer had refused to pay his insurance at the last minute, leaving him with a possible sum of six cost figures and incredible stress and anxiety for him and his family,” Rosamond said.
“He said his previous insurer did not express any concerns when he informed them about the installation of a tow bar.
“This, combined with the fact that the modifications section of the checkout process at MoneySupermarket did not include a tow bar, meant I had no reason to click ‘yes’ when asked about the modification.”
Following a nine-month dispute with Flow, a subsidiary of Allianz, the Financial Ombudsman Service ruled in favor of the insurance company.
However, the Financial Conduct Authority’s consumer obligations rules, which came into force in July 2023, state that “important information should not be hidden in extensive terms and conditions.”
An Allianz spokesperson on behalf of Flow told This is Money: ‘We understand the distress caused by this accident. Making modifications to your vehicle can have serious implications for your car insurance policy if not declared and can lead to invalidation of a policy.
‘The policy chosen did not allow for modifications and if we had been informed that a tow bar had been fitted we would not have provided the insurance.
“The FOS has reviewed this case and its decision, which is binding, has determined that the result we reached in this case was fair and reasonable.”
A MoneySupermarket spokesperson said: “We are confident that the supporting information we provide throughout our customer journey meets the requirements of the FCA’s consumer obligations.”
However, Auto Express said it is not entirely convinced.
As such, the automotive magazine and website have written to the FCA requesting an investigation into information about modifications on insurance websites.
The Caravan and Motorhome Club currently has around one million members, suggesting that many vehicles on British roads are fitted with tow bars.
“We believe that the current wording often shared on insurance sales websites around ‘modifications’ is a trap set for the unwary,” Rosamond added.
‘Insurance sales and comparison sites should offer greater clarity and detail about what constitutes a modification – especially in relation to towbars, as we have seen – and provide specific information about the potential risks of making an incorrect declaration.
Auto Express also believes that it is unreasonable for insurers, FOS or FCA to expect the average customer to know that fitting a removable towbar is the type of modification that could result in cancellation of a policy.
Rosamond continues: ‘We also think that if an insurance company offers a policy that it knows does not cover cars fitted with trailer hitches, then it has a responsibility to make that exception clear to potential customers before collecting their money.
“We’d like to think you’d also ask potential customers if their cars have tow hitches fitted, before issuing any policies.”
Allianz/Flow told Auto Express that it would not attempt to claim third-party costs from the driver, although it was entitled to do so following the Ombudsman’s decision, but Rosamond wants the insurer to go further and cover the driver’s costs.
Rosamond concludes: ‘We told the insurer that we expected it to reinstate cover for the driver, as well as resolve any third-party claims where appropriate.
‘We also said that we think Allianz/Flow does not appear to be acting in good faith, given the lack of clarity of information provided about towbar fitting at the point of sale of its policies. In fact, it seems to us as if Flow has jumped on a “fine print” violation, one unrelated to the claim itself, simply to avoid a payment.
“We are waiting for answers, but it is clear that something must change so that no other driver has to go through a similar experience.
“In the meantime, we urge all motorists to inform their insurers if their car has any modifications, no matter how minor, and whether they made them themselves, a previous owner or even the supplying dealer, to avoid being caught out in the same way.’
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