Vehicle Modifications Could Cost You Your Insurance Claim: What You Need to Know

When purchasing a new vehicle, we often consult everyone we know and think twice before making a decision. However, after a few days, many owners add extra fittings or make modifications to make their vehicle stand out, assuming that minor changes won’t cause any harm. Unfortunately, this assumption can lead to significant financial losses. If such modified vehicles meet with an accident or require repairs, insurance companies are outright rejecting the claims.

Preventive Measures You Must Take
Maintain Manufacturer Specifications: It is always safest to maintain the vehicle exactly as manufactured. These original specifications are what are recorded in your Registration Certificate (RC).

Inform Your Insurer: If you decide to make any modifications or add extra fittings, you must inform your insurance company and have these details updated in your policy.

Update the RC for Major Changes: For critical modifications, you must approach the Road Transport Authority (RTA) officials to get the changes officially recorded in your RC.

Engine Fuel Conversions: Many people buy petrol or diesel cars and convert them to run on LPG. This crucial detail must be updated in the RC and immediately communicated to the insurance company.

Ensure Claim Approval: By taking these prior legal steps and keeping your insurer informed, you can ensure that your claim will be approved even if the modified vehicle meets with an accident.

Practices to Strictly Avoid
Commercial Use of Personal Vehicles: Some owners use vehicles registered for personal use on a rental basis. If an accident occurs during such use, insurance companies will not pay any compensation. Rental vehicles fall strictly under the commercial category, which requires a different policy with higher premiums.

Unapproved Structural Changes: Some operators purchase regular travel buses and convert them into sleeper coaches. If the RC still shows the vehicle as a “seating” bus, the insurance policy becomes invalid in the event of an accident.

Gain Clarity on Insurance Policies
When purchasing a new car, a three-year insurance policy is standard. However, to reduce the premium burden, some buyers opt for a comprehensive (full-coverage) policy for the first year and only third-party insurance for the remaining two years. Many later forget to upgrade or renew, and the harsh reality only comes to light after an accident.

Know Your Rights: You should gather full details about insurance options at the time of purchase. You do not have to yield to dealer pressure; as a customer, you have the full right and flexibility to choose your preferred insurance company.

Upgrading Your Policy: Even if you initially took comprehensive insurance for the first year and third-party for the next two years, you have the option to upgrade to a comprehensive policy for the remaining duration after the first year ends.

The Danger of Lapsed Renewals
When buying a new bike, a five-year insurance policy through the dealer is mandatory, while new cars require an initial three-year policy. Despite regulations mandating timely renewals after these periods expire, statistics show that nearly 40% of vehicle owners are failing to renew their policies. This trend of driving without active insurance is particularly high among vehicle owners in rural areas, exposing them to massive financial and legal risks.