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Modifying your car can put your cover at risk

Personal Finance

Do you know that if your car is insured as a standard vehicle, but you have modified it to be faster or more powerful and have not informed your insurance company, your claim may be rejected in the event of a loss?

Mpumelelo Tyikwe, the managing director of Alexander Forbes Insurance, says it is important to tell your insurer if you have installed accessories or modified the engine to enhance your car’s performance.

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Tyikwe says insurers use power as a rating factor when they assess your risk – and hence, the premium you pay. He says it is the power-to-mass ratio of the vehicle that is important. “If the power is increased and the weight remains the same, the vehicle can accelerate quicker and go faster.

“It is one of many rating factors that are considered, but it is an important one, because accidents cause more loss than theft, and damage tends to be more severe with more powerful cars.”

Tyikwe says that power-enhancing modifications, coupled with the fact that the car may be driven by a young driver (younger, inexperienced drivers typically tend to engage in higher-risk behaviour on the roads), may result in an insurer deciding not to cover the vehicle at all.

“If you do not disclose the enhancement, the insurer is prejudiced in that it was not able to charge the correct premium or was not given the opportunity to decline the risk,” Tyikwe says. He says your intention may be simply to improve your car’s fuel economy, but the effect can still be that power output is increased.

Tyikwe lists examples of vehicle performance modifications that your insurer needs to know about:

• Cool-air induction system: if you want your vehicle to run better, opening up its airflow is a good start. “The simple process of redirecting the filter to draw cooler air is good for power gain and fuel efficiency,” Tyikwe says.

• Turbocharger: this compresses the air and forces it into the engine, boosting its power considerably.

• Intercooler: a type of air-conditioner that keeps the air cool for turbocharged engines.

• Exhaust enhancements: enhanced exhaust systems have less back-pressure than conventional exhausts, with less obstructions and bends, so that the exhaust flow is improved.

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