1) Will ‘modified’ vehicle be covered by motor insurance?
All insurance contracts require both parties to observe utmost good faith and not deliberately mislead the other party or to hide material facts. In this instance, a modified car may increase the risk exposures resulting in higher premium payable or at the extreme, render an insurance cover not being considered. Hence, a vehicle owner needs to inform his insurance company on the modifications accordingly to enable the insurer to evaluate the risks and the premiums or acceptance of cover. If a policyholder does not inform his insurer about the car’s modification and due to that modification met with an accident, his insurer has the right to repudiate liability under the policy
2) Can a policy holder make a claim for vehicle damages resulting from participation in illegal activities such as illegal racing?
Generally, a standard motor policy does not cover all losses. Examples of the exclusions are: your own death or bodily injury, your liability against claims from passengers in your vehicle, and loss or damage arising from an act of nature such as flood, storm and landslide.
The Association would like to remind motorist that damage to a vehicle resulting from an illegal activity is not covered. Even if you are buying a comprehensive motor policy, it does not cover vehicle damage arising from accidents caused by driving illegally, for example driving while under the influence of drugs and alcohol, racing, etc.
3) What is PIAM’s advice for motorist who are considering to modify their vehicle?
Safety of the passengers and other road users are important factors to consider when modifying your vehicle. It is essential to remember that certain modifications can affect the safety of your vehicle. The Association advises motorists to only modify a vehicle in accordance with the guideline and approval of the authorities. In addition, if you modify your vehicle and don’t inform your insurance company about the modifications made, your insurer has the right to cancel the policy or avoid paying a claim.