We all know car insurance can be expensive – especially for young drivers. However, it is extremely important not to fall into the trap of being less than honest when getting your quotations as a little white lie on your application form could end up costing you dearly in the long-term.
The ABI recently announced that over 4,000 fraudulent motor insurance applications are being uncovered every week. Last year, there were 212,000 attempted false car insurance applications found, up by 18% on 2013.
What counts as lying?
A car insurance application could be considered fraudulent if a driver deliberately withholds information when answering a question posed by the insurer when calculating your insurance premium. This includes:
This is when someone claims to be the main driver on a car insurance policy when they are not. For instance, adding a young driver to an older driver’s policy is often cheaper than taking out a separate policy. However, this is illegal if the young driver is actually the main driver of the car. Find out more about fronting here.
Similarly, “address fronting” is when the address listed on the policy is not where the car is usually kept. Drivers may lie about this to try and cut costs, but this can invalidate the policy and not protect you in the event of a claim.
With an insurethebox policy, our black box can identify location so we can easily check that the address you’ve provided is correct. If we can show (using the positioning signal from the box) that you are regularly parking somewhere else we will discuss this with you, and the policy could be cancelled.
Use of the car
This refers to wrong information about the class of use of your car, such as putting down “social, domestic and pleasure” when you also use your car to drive to work.[symple_toggle title=”Did you know?“]If you drive to a train station for work, you will still need to put “commuting” as the class of use because you are using your car to drive in ‘commuting’ hours.[/symple_toggle]
Furthermore, if you’re using your car as part of your job then you will need to add ‘business use’.
If you modify your car, for example by making simple cosmetic changes and not just performance enhancing changes such as upgrading the exhaust, you must still let your insurer know.
Other information you should disclose:
- A change of occupation.
- Any minor knocks, as well as serious accidents, that you have – even if you are not claiming for the incident you should still inform your insurer.
- Penalty points gained on your licence, any motor-related convictions or any other unspent convictions.
- Any increase or decrease in how many miles you expect to drive in a policy term.
What is the risk?
Providing false information can invalidate your policy. This means that the insurer has the right to cancel your policy, leaving you unprotected in the event of a claim and also possibly treating you as an uninsured driver. You can find out the consequences of driving uninsured here.
Drivers who have had their policy cancelled will have to declare this on any future applications, so it may be more difficult and expensive to get covered. Depending on the severity your insurer could also prosecute you for fraud, and this will mean you become blacklisted by nearly all major car insurers in the future.
Mark Allen, the ABI’s Fraud and Financial Crime Manager, said:
“Insurers recognise that innocent mistakes and oversights happen. But anyone lying to get cheaper motor insurance, or tempted by cheap insurance offers without first checking that they are genuine, risks driving illegally. The consequences include getting a criminal record and a massive financial headache if found to be at fault for a crash.”
Our sister company has a handy guide to saving money on your car insurance – the right way!