INSURANCE

What Happens If I Lie On My Car Insurance Policy?

Publication Date: Friday, November 21, 2008

Confused.com would never encourage anybody to lie on their car insurance application in order to obtain a cheaper quote. But why not? What’s the worst that could happen? Surely a little white lie in order to save a few quid isn’t really hurting anyone? Right?

Actually, it’s pretty important to give accurate information on your application, for a number of reasons. It seems that a number of people in the UK do lie on their application just to reduce premiums. However, in doing so they run a huge risk of invalidating their whole policy. This could prove nightmarishly expensive in the event that they crash into another driver, for example.

And a lie in this instance does not have to be a blatant mistruth. It could mean withholding a piece of information that the insurer would use in calculating the insurance premium, or misrepresenting the details to get a better price.

If an applicant is identified as having supplied false information, then the insurance company has the right to reject that application – and generally they will not hesitate to do so. Likewise, if the false information is brought to light in the event of the claim, then the insurance company can refuse to make any payment or provide a greatly reduced one. And depending on the severity of the lie, the driver runs the risk of being blacklisted by all major car insurance providers. Such a situation could make it virtually impossible for the driver to obtain car insurance from the mainstream providers, and thus get a cheap premium to drive legally on UK roads.

A victimless crime?

In addition, it is not only the cost to your car that could see you out of pocket. If an insurance company has to make any payment towards a third party, then later discovers you have lied to get cheaper insurance, they could look to recover this money from you.

Uninsured drivers and those with false insurance cost the motor insurance trade millions of pounds annually… a cost which is then passed on to honest motorists in the form of higher premiums! In fact, the Association of British Insurers has claimed that the cost to the honest insured motorist averages £30 per year each.

The most commonly falsified bits of information are a driver’s age, address, and where the car is parked overnight. Other areas where people lie to reduce premiums include motoring offences (including drink-driving convictions), annual mileage and occupation.

Fighting back

Insurers, the police, the DVLA and other bodies in the car insurance industry are increasingly sharing data in order to clamp down on those committing insurance fraud. In addition to such databases, they are increasingly applying data-mining tools to identify anomalies common to fraudulent information supplied in obtaining insurance. The hope is that the use of more sophisticated technology in identifying such trends will ultimately lead to less of an impact on the honest motorist.

Another way

Generally, false information is supplied in the application in order to obtain lower premiums. However, Confused.com believe that this is unnecessary. After all, there are several perfectly legal ways of reducing premiums. Follow this link to find out what they are.