Lying to an insurer about any modifications made to your car – especially those that will enhance performance – can land you in deep trouble if you have an accident.

A motorist, who admitted he was speeding at the time of an accident, has had his claim rejected partly because he did not disclose to his insurer that his car had been modified. 

Rejecting his claim, the insurer said he had been driving recklessly at the time of the accident and had it known that his car had been modified to make it faster, it would not have taken him on as a client. 

Dissatisfied with the outcome of his claim, the motorist lodged a complaint against his insurer with the office of the Ombudsman for Short-term Insurance. But the ombudsman found in favour of the insurer.

The accident took place on a stretch of road where there had been roadworks. The normal speed limit in the area was 120 km/hr, but during roadworks it was 80km/hr. Although the roadworks had been completed at the time of the accident, the 80 km/h speed limit sign was still in place. 

The driver had argued that it was not applicable anymore and that the speed limit was 120 km/hr. He also argued that while he was driving at about 130 km/hr, this was only one factor that contributed to the extent of the damages to his car. 

The reason the accident occurred was the unlawful act of a taxi driver who did a U-turn on the freeway, the driver claimed. 

But the insurer did not agree. Its expert’s report found that prior to and at the time of the accident, the driver was travelling at a speed in excess of 142 km/hr.

The front bumper and most of the front-mounted engine parts were “scraped and torn away” during the collision and the car’s subsequent “tyre-less path of travel over a distance of 224 meters to its final rest position”, the expert report said. 

In light of the report and the evidence, the insurer found that the driver had failed to take the necessary action and precaution to ensure his safety and that of other road users “in that he deliberately exceeded the speed limit”. 

The driver argued that the taxi collided into him from the left side when it made an illegal U-turn and that he could not have foreseen this. 

But the insurer said that the driver’s admission that he was travelling at 130 km/hr showed that he had failed to take precaution and action to avoid the accident by deliberately exceeding the speed limit. A reasonable person would not drive at an excessive speed. This constituted reckless behaviour.

The ombudsman had harsh words for the insured. The driver was not just negligent but was reckless and the speed travelled by him was material to the collision. By travelling at such a high speed, he was “courting danger”, the ombudsman said.

“Consequently, we find that the insurer is entitled to reject the claim under the due care clause,” the ombudsman ruled.

The insurer had also advised that had it known that the insured’s vehicle was modified, as per the assessor’s report, it would not have accepted the risk. 

“This is a basis on which the insurer can reject the claim in its entirety. It may also void the policy. 

“The insurer asked the insured at the sale of the policy whether the vehicle was modified and the insured said ‘no’. Had the insured provided the insurer with the correct information, the insurer would not have accepted the risk and the policy would not have been incepted. 

“Therefore, the insurer is entitled to reject the claim in its entirety on the basis that the vehicle is an unacceptable risk. Consequently, the insured did not have cover for the loss. The insurer advised that it will void the policy and refund the premiums,” the ombudsman said, adding that it could not fault the insurer’s decision to reject the claim.