13. roadworthiness
Most motor policies contain a specific requirement that the vehicle must be maintained in a roadworthy state. When deciding whether it was reasonable for an insurer to reject a consumer’s claim, we will look for evidence that the loss or damage was mostly likely caused – or was significantly contributed to – because the vehicle was not roadworthy.
An insurer can also reduce a payout on the basis that the vehicle was not in good condition. In these cases, we will look for evidence that the condition of the condition of the vehicle – or parts of it – were poor to decide whether this deduction is fair.
If the vehicle did not have a current MOT certificate, we will consider how likely it was that the vehicle would have passed an MOT test. If we decide – on the balance of probabilities – that the vehicle would have failed the test, we are likely to say that a deduction of up to 10% is reasonable."
http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html