Misrepresentation is exactly that, the difference being whether it was innocent or not. Even if the policyholder was not aware that the vehicle was modified it does not change the fact it was.

From personal experience 9 times out 10 they are aware that the vehicle was modified (in a private sale most previous owners boast about this) and plus it would be reflected in the price the policyholder paid for the vehicle. "Why pay £500 more for this vehicle than an identical one down the road"??

With regards to the third party, regardless of the outcome of the policyholders claim the insurer will deal with it on a "RTA" basis (providing their client is at fault), basically they will meet the claim and more than likely pursue the policyholder to refund.

At the end of the day pick the phone up and demand to get some action today to progress the claim, whether that be a confirmed appointment for them to interview you, a decesion to be made etc....