Insuring Car With Manufacturer Fitted Optional Extras - are you sure you are insured?

Discussion in 'Insurance & Finance' started by Stocho, Mar 1, 2015.

  1. Stocho

    Stocho Hardcore MB Enthusiast

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    I was considering buying a "Fully Loaded" car and touched on the issue of insurance http://www.mbclub.co.uk/forums/spotted-ebay/187220-57-e320cdi-full-amg-bodykit-what.html#post2068670 . The question is much wider than that particular car so probably worth discussing separately.

    The question that arose is whether manufacturer fitted options (and in a truly "fully loaded" car there could be well over half a dozen of those) count as modifications and should be declared.

    I am fully aware that any scam-bag businesses (of which insurers are probably the worst) love to segregate and divide the customer base as much as possible so that prices could be increased. Also for the vast majority of people using price comparison sites is likely to find by far the cheapest price in shortest amount of time.... not sure that these will work at all if one has about half a dozen or more options to declare....


    Having done some research ... some price comparison sites in their explanation state that
    "Modifications are non-standard changes made to the car after manufacture, such as new spoilers, alloy wheels, exhaust pipes, changes to the engine capacity etc."


    While some insurers like Direct Line:
    "Modifications are changes to your car’s standard specification, including optional extras"

    So I pretty much doubt that if I get a fully loaded car I will be able to get any valid quotes at all through price comparison sites. Also I am fearing that in the case of fully loaded 8 year old E-Class if insurance premiums are taken into account over the next 8-10 years it might well be cheaper to buy almost brand new Lexus which will have all the extras and more as standard spec.

    What is your experience of insuring cars with lots of optional extras? Are you actually sure you are insured? Could, in case of a major accident, insurer take away your home and any other property (they do ask the question whether you are home owner and lower your premium if "yes" for a reason!!!) because you did not mention that your Avantgarde has heated seats which, whilst included on almost all saloons, is an optional extra?
     
  2. AMGeed

    AMGeed MB Club Veteran

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    You bring up a good point, but unless buying a new car where you alone determine the optional extras, I don't see how Direct Line's stance can be applied.

    If I look at a second hand car and see it has an electric rear blind and leather seats, how do I, as a buyer know whether these are optional extras or standard equipment?
    How many people look at the data card to see what has been fitted in the factory at the time of production, then work out if it's an option or standard equipment?

    In answer to your last paragraph, yes my car does have lots of optional extras,factory fitted when assembled. I give my car registration and make to my insurer and accept(or not as the case may be)the price and consider I'm fully insured.

    Should I later have to make a claim and the insurer were to pull a stunt like saying I didn't declare extras and no we won't pay out, I'd see them in court.
     
  3. flowrider99

    flowrider99 Hardcore MB Enthusiast

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    Just had this with my insurer, Privilege. My ML350 has a number of extra's like leather heated seats, Command, running boards plus a couple of other things, the insurer noted them all down but the quote didnt change. I hope there isn't anything else fitted that i am not aware of.
     
  4. MD5

    MD5 Hardcore MB Enthusiast

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    It's always difficult when buying a new 2nd hand car if you don't know what the options are. I always state that whilst I don't know what is standard fitment and what isn't, the car doesn't have anything over and above what it left the factory with, so therefore hasn't been modified. This has led to one or two heated conversations, which prompts me to ask for a list of what is standard, and what isn't. If it left the factory like it, it isn't a modification, and I sometimes wonder if someone somewhere in the insurance chain had misinterpreted the difference between factory fitted options and modifications.

    I put 18" AMGs on a car last year, changing from 17", but as the wheels were available as a factory fit option, it didn't alter the premium, which surprised me.
     
  5. OP
    OP
    Stocho

    Stocho Hardcore MB Enthusiast

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    Well English law pretty much favours insurers. For example with most contracts you must not lie BUT you are not obliged to volunteer negative information. With insurance contracts by law you are obliged to volunteer absolutely any information you think insurers might care to use to affect your premiums. So called utmost faith contracts. I suppose insurers could argue you had a contract, it was up to you to read it and if it was not clear what is optional what is not to make enquiries.


    I suspect for minor modifications they would seek to rely on these clauses only in cases of really huge damage - hundreds or thousands or more. Than they would still payout to third parties and than seek to recover from their client.

    In fact the system works grossly in their favour. They collect premiums and if there is no claim they will not return your premium if presence of a mod means that you were not really covered. If there is a minor claim they will surely settle without investigation anyway. Moderate claim and presence of major undeclared mods could easily invalidate it. Huge claim - and they are immune (if you have significant assets).


    Yeah, but a contract is a contract. Insurers would argue if not sure you should seek professional advice.


    Well the most likely scenario when they would play a stunt like that would be in case of a huge claim - not just damage to your car. In that case they would always pay the third party and then sue you. You can fight it in court but are you sure you would win? I think that there is every chance to loose in English courts. And lawyers fees on both sides, payable largely by a loosing side, could easily amount to hundreds of thousand as the case would be heard in the High Court.

    Financial Ombudsman, not courts, could give some hope to consumers as the Ombudsman could consider the issue of fairness which courts would ignore and stick purely to the letter of the law which favours insurers.
     
  6. whitenemesis

    whitenemesis MB Club Veteran

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    I retrofitted many optional extras to my 203. Each time I notified my insurer, Direct Line. Each time I was asked if this was originally offered by the manufacturer as an option on my model and year. They were and there was no change in premium.

    I made sure each retrofit was recorded on the policy as I wanted to be sure, should I need to make a claim, the upgraded items would be covered and fitted in any repairs. The bi-xenons were a major cost and still Direct Line confirmed no change all noted and covered.

    Bottom line if in doubt, declare it. Talk with the insurer, have anything optional recorded. Should the worst happen records will show you did all you could to comply with their T&Cs.

    Edited to add.... When I did modify the car by adding coilovers, the premium did change. Direct Line were very clear on what modifications they would accept and those they would not. Braided brake hoses being one! Imperative one contacts the insurer before doing any mods...
     
    Last edited: Mar 1, 2015
  7. OP
    OP
    Stocho

    Stocho Hardcore MB Enthusiast

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    Well you have a contract with YOUR insurer and unfortunately each insurer is allowed to be different. For example Direct Line state in very plain English in their terms and conditions:
    "Modifications are changes to your car’s standard specification, including optional extras"

    Interesting point would arise if you found insurer via a price comparison site that defines modification in a different manner (see first point). I suspect the insurers terms would apply anyway.
     
  8. OP
    OP
    Stocho

    Stocho Hardcore MB Enthusiast

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    I do not even care whether options would be covered. I do care if some minor options such as electrically heated seats would invalidate the policy altogether in case your insurer has to pay out a huge amount to third parties. I believe the chance of me having accident is small and would not loose sleep over the risk of my car not being covered even in totality... But third party payouts (that could amount to millions) not being covered - yeah - that is something that could keep me awake at night even if the risk is small.
     
  9. mct_cars

    mct_cars Hardcore MB Enthusiast

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    In answer to your question on the other thread about why you would be bothered if your Pano roof was insured at all - what happens if a stonechip turns into a crack?

    You seem to be trolling everyone's answers to everything that's been said, so I'm out of trying to give helpful advice!

    Buy the car, don't buy the car, I don't care. Get insured properly - I do care 'cause it might be me or one of my children you hit. Ignorance is no ecuse in the law and ticking the little box that says you've understood the terms and conditions means exactly that.

    FFS millions of people manage this every year, not one of them will like it, but don't make it complicated!
     
    Last edited: Mar 1, 2015
  10. mat8n

    mat8n Banned

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    when i crashed my sl 350 it had 18" amg alloys, pano roof at least that were optional extras, I don't know if they were factory or retro fitted. It may have had more options?

    But I bought the car as a standard SL all the items were factory options so it was a factory spec car. I had no issues over anything when they wrote it off.
    I was with direct line and I discussed with the assessor the value of my car and brought up the wheels the roof and also the red leather interior that were above 'standard' spec.
    I got more ££ for my car after this conversation.

    If it's second hand you cannot know if there are factory options added, so whatever spec it is, it's standard factory spec. You know if after market items are fitted.

    stop scaremongering
     
  11. OP
    OP
    Stocho

    Stocho Hardcore MB Enthusiast

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    Stonechips are likely to be flying in the direction (almost) parallel to the surface of the roof, area much smaller chances of it being hit much smaller than windscreen.

    In any case do not believe claiming insurance for minor things - there is every chance I will pay it back through increased premiums in the subsequent years.


    Well that is the problem that millions might be thinking they are doing it properly while in fact they might not be and are at the mercey of their insurers who will most likely payout without problems on small and medium value claims. Just read repplies above and you will see that while some do declare every option to insurers some do not consider it necessary. And try declaring every option on price comparison website!

    There is a valid discussion to be had. For example I have a hypothesis that the right approach is NOT to declare it on price comparison sites and then ring to the cheapest insurers and see whether they will honour the price even given the optional extras. if you put 6-10 mods on price comparison sites the quotes will be sky high.
     
  12. Rory

    Rory MB Club Veteran

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    That's not been correct for several years. They have to ask clear questions and can only deny a claim if you've given false information.
    issue 46 - non-disclosure in insurance cases
     
    3 people like this.

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