What Happens If I Lie On My Car Insurance Policy?
Author: Rita Ziljiansie
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.
0 Comment
How it could stop your policy paying out ?
Author: Rita Ziljiansie
Life Insurance: Non-disclosure - how it could stop your policy paying outPublication Date: Monday, November 24, 2008
This puts the onus on you, as the insured person, to disclose to an insurer anything at all that could affect the risk you’re asking him to insure against. Even more critically, any non-disclosure by you of any material information or fact can allow the insurer to declare the contract null and void in law. In that case, nothing is paid out in the event of a claim under the policy you thought you had.
Material facts
As you can readily appreciate, this principle has a pretty significant bearing on any life assurance policy you might want to take out. What are the 'material facts' that might possibly affect the risk of you dying within the term of the proposed life cover? What are the material facts from your medical history or from your lifestyle choices? It’s difficult, isn’t it? Especially when you remember that the onus is on you to decide what is material, whether the insurer asks a specific question about it or not.
The question gets even more complicated when you’re also thinking of taking out critical illness insurance. Just how much of your medical history and how much of your lifestyle should you disclose? The insurer certainly won’t go through the expense of scouring your medical records for you (though he will probably ask for access to those records should the need arise at some future date). The burden is on you and non-disclosure of anything that the insurer later determines to be a material fact might be enough to enable him to reject a claim under the policy.
Five things to remember
Whenever you’re completing a proposal for life insurance or critical illness cover, there are certain questions which demand particular attention. Indeed, there are identifiable questions which insurers themselves have complained that people too often fail to address. The following are the five principal conditions that insurance companies have identified as being insufficiently disclosed by people seeking life insurance or critical illness cover :
- Treatment (which will include tests and investigations) for multiple sclerosis, affected vision, numbness or
disorientation;
- Any current medication or treatment (or tests and investigations which might lead to medication or
treatment);
- Whether or not you are a smoker or drinker of alcohol, and whether you have been advised to reduce your
use of either tobacco or alcohol;
- Whether you have suffered any depressive illness; and
- Whether you have received any medical treatment at all during the past year.
If a claim is rejected because of a non-disclosure, the usual recourse of insurance companies is to return to the customer all premiums that have been paid and so put both the insurers and the customer in the same position as they were before the insurance policy was issued. However this will be precious little comfort to you, the intended insured, because by then it will be too late.
Why Do We Need Car Insurance?
Author: Rita Ziljiansie
Publication Date: Friday, December 05, 2008
Having car insurance is an absolute must for all motorists on UK roads. But why is this the case? Well, the short answer is that it is a legal requirement to have at least third party cover. Then why is it a legal requirement? That’s where the long answer comes in.
First and foremost, UK road users need to have a basic level of insurance to indemnify third parties. This has been law since 1930, and was updated in the Road Traffic Act 1988. The law provides that you must have some kind of insurance or protection against their liability to third parties (which could mean other road users or pedestrians) in the event that personal injury is inflicted upon them, or that their property is damaged, as a result of your use of the road. In simple terms, other people deserve to be protected against any fallout that may result from your use of a vehicle. Being insured will protect unwitting parties therefore against costs incurred due to injury, damage to their vehicle, and legal costs.
Consider the position where you accidentally drive into another car, but have no insurance. You may not be able to afford to cover damage to the other driver’s car, or medical bills incurred due to injury inflicted. Any resultant legal costs may also be substantial. But surely it’s not fair that the driver who isn’t at fault foots the bill?
One may be given to think ‘Well, I’m a good driver with a perfect track record – I’m not going to cause an accident’. This may very well be the case – however, the only way to guarantee such a clean-sheet is to never get behind the wheel. There are countless ways in which an accident may be caused where you may not consider yourself to be at fault in normal terms, yet would be at fault in legal terms, as the cause of the incident is not an insured party. Examples of this could include collision resulting from skidding on black ice, or swerving to avoid an animal that has strayed into the road.
So it becomes apparent that car insurance is not a matter of preference, but of legal necessity – and in most cases economic necessity too.
Ok, so why might one need a level of cover over and above the minimum legal requirement? Well, a greater number of drivers will have third party, fire & theft (TPFT) than third party only, as this will indemnify the vehicle user in the event that their pride and joy is stolen or burnt to a crisp. The desire to protect oneself against such eventualities is fairly commonsensical. Although there have been advances in anti-theft technology such as immobilisers and alarms, one can never fully alleviate the risk of a car being stolen or damaged in an attempted theft.
Furthermore, upgrading to comprehensive cover will protect you against most eventualities that this capricious world may choose to throw at you. The key difference between this cover and less expansive levels of car insurance is that you will be indemnified for damage to your own vehicle, even if the incident is deemed to be your fault. Although you do not ‘need’ this level of cover in the sense of a legal requirement, it is usually prudent if – for example – you could not afford to replace your car in the event that it was written off.