Swaybar Disconnects - Ford Raptor

[BigJ]

Fair enough for me.

Thanks for taking all the time, Ming.

 

[MarkT]

I don't really want to stir the pot (again), and I should probably take the cue from Ming, but...

I do have to admit I'm a bit confused by Mark's example; I'm not entirely sure how having a daughter equates to out and out lying on an application. Does the application, in your example, have the questions (1) Do you have a daughter and (2) Regardless of whether or not you currently have a daughter, do you agree that no daughter of yours will ever ever drive the insured vehicle? If he answers are (1) No and (2) Yes, and he in fact does have a daughter who did in fact drive the insured vehicle, now I think now we have a fair parallel between your example and the case I linked too.

But I'm not sure thats important anyway; I think you're focusing on the wrong issue Mark. Specifically, the contract language says "no mods" (paraphrasing). Just like Nationwide's insurance says "no mods".

So while you seem to be focused on the he-didnt-tell-his-insurance-he-had-mods issue, I think whats more important is that he was screwed no matter what; even if he had coverage before adding the mods, then added them after being approved for coverage, he would have been denied. The only difference would have been 'why' the insurance company chose to deny him.

Bottom line was the insurance company had a few choices when it came to denying this guy's coverage. The fact that they chose the former reason does not invalidate the fact that they could have chosen the latter reason (and still might try the latter if the former is thrown out in court).

And that, at least as far as I'm concerned, is the entire point of this discussion.

I don't agree they had a few choices. I don't think the insurance company could easily deny his coverage for the mods had they been done after-the-fact, even if they were illegal. (With the caveat that the insurance would not have to reimburse for the cost of the mods if they were not told about them.) What has been undisputed is that they could deny his coverage because he LIED about the mods when he applied for insurance. Which is exactly what they did.

You need to be straight with the company because it *is* about the mods, and no amount of spin on the ball will change that. We want the opportunity to evaluate the risk and come to a decision. Deny a company that opportunity and your coverage is in jeopardy. Period.

I think we might be saying the same thing except you are being specific about the mods. Is it about the mods that got this guy into trouble or the fact that he lied about them? I say "the lie". Sure, if there were no mods the denial wouldn't have happened. (nothing to lie about). But there are also many other cases where coverage was denied in the same fashion because of a lie on the application. It's about being honest with your insurance company. Whether it's mods, or teenagers, or driving records, a salvage vehicle when you know the title was "washed", or accident records, odometer readings, or whatever the insurance company wants to know in order to make their decision. Don't lie on the application. Period.

As far as after-the-fact mods? As said, that could depend on your policy. laws, etc. Too complicated to generalize about. But the one fact that I can't get past is that with the millions of vehicles with modified suspensions on the road, not one case has been presented where the insurance coverage for an accident was denied solely because of the mods. I think it would be hard for an insurance company to do this under the law and it would set a dangerous precedent that could allow insurers to deny coverage in any case where the insured did something an "expert" said was "unsafe".

The point of this discussion for me? Fear is a great motivator. If someone we all trust and respect warns me about a danger, I listen. But I also verify. I trust MMD and BigJ. But I could not and have not verified that "canceled insurance" is a significant concern when it comes to deciding on removing a sway bar. (or other mods)

Everyone has to make their own choice. I'm not removing my sway bar... but not because I'm worried about my insurance... and if I think about it, that's exactly my point.

P.S. My apologies for leaving out the whole story... every application I've filled out has some form of this question. My "teenage girl" example was based on a case where a woman was denied coverage after an accident because she lied on the application where it said something like "do you have any children over the age of 14 living with you?" She said "no" but her daughter had recently turned 14. There apparently was no contesting that one. She lost... not because she had a teenager... but because she lied about having a teenager.

 

[eldercaddy]

Hi BigJ. Do you mean you are trading it? Wonder why? Correct me if I am wrong.

 

[warrior]

not needed, my Power Wagon had electronic disconnect and hardly used it.

 

[BigJ]

I really REALLY don't want to kick this hornet's nest again, but something just came to my attention that needs to be posted here.

In short:

(1) dude1 applies for insurance, answering "No" when asked if the vehicle has been "modified". He in fact did have a lift kit and oversized tires installed at the time.

(2) dude1 runs over dude2 and messes up dude2's foot.

(3) dude2 files a claim with dude1's insurance.

(4) dude1's insurance rescinds his policy, returns his premium, and refuses to defend the claim based on dude1's misrepresentation regarding his "modified" truck. They left him hanging wide open, exposed and totally on his own.

(5) left on his own, dude1 eventually settles with dude2 personally, and agrees to pay dude2 $350k out of his own pocket.

(6) dude2 then sues dude1's insurance for not covering dude1. At this point, due to the terms of the settlement with dude2, dude1 is totally out of the picture. This is now an issue between dude2, and dude1's insurance.

(7) the trail court finds dude1's insurance should not have denied the claim, and the insurance company is ordered to pay over $460k to dude2 as a result. This is in addition to the money already paid to dude2 by dude1.

(8) dude1's insurance appeals the decision

(9) the appellate court finds that in fact dude1 had "modified" his vehicle, and that his insurance was within their right to rescind the coverage AFTER THE ACCIDENT AND NOT PAY THE CLAIM FOR THAT ACCIDENT. The $460k ruling was overturned.

Moral of the story? There's now case law on the books that not only sets a precedent for insurance companies to throw you on your arse after the fact without covering you if you misrepresent yourself on the app, but it also defines that misrepresentation as "modified" to at least mean lifted and with larger tires.

I don't see anywhere where dude2 had to prove the lift/tires were a contributing factor to the accident. Maybe its there, but even if it is, dude1 pays $350k out of pocket.

The insurance company used dude1's misrep to not pay. The courts not only agreed he misrepresented, but they also agreed the insurance company did not have to pay based on that misrep. IMHO that's the trifecta I've been talking about... this case proves that (1) something as benign as a lift and tires equals "modified", (2) an insurance company can rescind your insurance at any time if they feel you misrepresented yourself, regardless of any pending claims and (3) an insurance company can deny a claim based on that misrep without having to even establish if that modification contributed to the accident.

Not good. Not good at all.

http://www.boehmbrown.com/hotcases/hotcase.asp?idhotcase=477

 

[Xjrguy]

I really REALLY don't want to kick this hornet's nest again, but something just came to my attention that needs to be posted here.

In short:

(1) dude1 applies for insurance, answering "No" when asked if the vehicle has been "modified". He in fact did have a lift kit and oversized tires installed at the time.

(2) dude1 runs over dude2 and messes up dude2's foot.

(3) dude2 files a claim with dude1's insurance.

(4) dude1's insurance rescinds his policy, returns his premium, and refuses to defend the claim based on dude1's misrepresentation regarding his "modified" truck. They left him hanging wide open, exposed and totally on his own.

(5) left on his own, dude1 eventually settles with dude2 personally, and agrees to pay dude2 $350k out of his own pocket.

(6) dude2 then sues dude1's insurance for not covering dude1. At this point, due to the terms of the settlement with dude2, dude1 is totally out of the picture. This is now an issue between dude2, and dude1's insurance.

(7) the trail court finds dude1's insurance should not have denied the claim, and the insurance company is ordered to pay over $460k to dude2 as a result. This is in addition to the money already paid to dude2 by dude1.

(8) dude1's insurance appeals the decision

(9) the appellate court finds that in fact dude1 had "modified" his vehicle, and that his insurance was within their right to rescind the coverage AFTER THE ACCIDENT AND NOT PAY THE CLAIM FOR THAT ACCIDENT. The $460k ruling was overturned.

Moral of the story? There's now case law on the books that not only sets a precedent for insurance companies to throw you on your arse after the fact without covering you if you misrepresent yourself on the app, but it also defines that misrepresentation as "modified" to at least mean lifted and with larger tires.

Not good. Not good at all.

http://www.boehmbrown.com/hotcases/hotcase.asp?idhotcase=477

More info.

http://www.floridainsuranceblog.com...ge-insureds-du/material-misrepresentaiton-in/

Apparently the state of Florida already has law on the books that allows an insurance company to rescind a policy if there is a misrepresentation on the application for insurance.

The application form included the statement that the applicant “agrees that [the] policy shall be null and void, and/or result in a claim denial if such information is false, or misleading, or would materially affect acceptance of the risk by [Mercury].” Similarly, section 627.409(1), Florida Statutes (2002), authorized an insurer to deny coverage and rescind an insurance policy based upon a misrepresentation or incorrect statement in an insurance application if:

(a) The misrepresentation ․ or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer.

[or]

(b) If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss.

 

[BigJ]

A couple of questions that I still do have are (1) what about "modifying" after the insurance form is filled out and (2) did the insurance company have to prove the misrepresented mods contributed to the accident?

I have to believe there's verbiage in the contract that makes the question about before/after irrelevant. Lawyers aint dumb.

As for (2)... that one freaks me the most, and it strikes at the heart of our discussion. If in fact your insurance company DOES NOT have to show your mod (aka swaybar removal?) had anything to do with the accident, that's really bad news. What I've read about the case sure seems to indicate it just didn't matter if the mod contributed or not; rather what mattered was the dude misrepresented himself, and in doing so the insurance company was able to point at that breech and get out of the contract.

In the end, this case proves to me none of this is fear mongering or "boogiemen"... this is now case law that cost a guy $350k (at least) and cost another guy over $460k... and maybe worse than all of that is the fact that its set a precedent.

 

[Xjrguy]

This exact thing has been happening across the country for years when it comes to health insurance.

Oh, you didn't know you had <terminal disease here>, well we are dropping your coverage when you try to get it treated now.

 

[MarkT]

A couple of questions that I still do have are (1) what about "modifying" after the insurance form is filled out and (2) did the insurance company have to prove the misrepresented mods contributed to the accident?

I have to believe there's verbiage in the contract that makes the question about before/after irrelevant. Lawyers aint dumb.

As for (2)... that one freaks me the most, and it strikes at the heart of our discussion. If in fact your insurance company DOES NOT have to show your mod (aka swaybar removal?) had anything to do with the accident, that's really bad news. What I've read about the case sure seems to indicate it just didn't matter if the mod contributed or not; rather what mattered was the dude misrepresented himself, and in doing so the insurance company was able to point at that breech and get out of the contract.

In the end, this case proves to me none of this is fear mongering or "boogiemen"... this is now case law that cost a guy $350k (at least) and cost another guy over $460k... and maybe worse than all of that is the fact that its set a precedent.

I still think you are missing the point.

The reason the insurance company does not have to show the mods contributed to the accident is very simple. It's because the issue is that there was "material misrepresentation" of what was being insured. Period.

There are similar cases where an insured "misrepresented" their driving record on the application. Something as simple as a minor moving violation. Then an accident happens, the insurance company investigation finds the misrepresentation and cancels the policy leaving the driver uninsured.

Does that mean everyone that has a a minor moving violation is suddenly subject to their policy being cancelled after an accident? NO! The insurance company is not cancelling the policy because of their driving record! They are cancelling them because they misrepresented their driving record on the application.

In the same vein, the whole "he got cancelled because he modified" is just as misguided in my opinion. He did not get cancelled because of the mods... he got cancelled because he misrepresented the mods on his application.

As far as the before/after "worry"... Again, the cancellation is because of the misrepresentation. Not because of the mod. Show me one case where someone was actually cancelled and left uninsured after a mod (AND misrepresentation was not the reason for the cancellation), and I'd say you have something to worry about.

Until then, relax and enjoy your freedom. (And NEVER lie to an insurance company on an application!)

 

[BigJ]

Mark all that's fine but this is the first time I'm hearing you agree that a lift kit and tires constitute a "modification". According to the court, they are. Officially.

Everything rolls down hill from there. That's the point.