The lies insurance companies are told (and why they're not recommended!)

Friday August 18

According to the Motor Insurance Bureau, one in ten motorists lie to their insurance company when taking out a new policy. The seriousness of the fib varies massively, but in theory, the smallest grain of inaccuracy on your insurance certificate could invalidate it. After all, the insurance policy is a legal contract and by purposely giving false or inaccurate information or even omitting details that have not specifically been asked for is construed by the law as committing fraud. Here we've compiled five of the most common lies car owners tell their insurers when taking out a new policy.

At number five is lying about driving licences. Most British insurance companies will accept full licences from any European country and several others too, though there are limitations, and just because the DVLA will allow residents of certain countries to drive cars here, doesn't mean an insurer has to cover that driver. Perhaps more seriously are motorists claiming to have a full driving licence when all they have is a provisional.

Obviously provisional drivers are a completely different risk for an insurance company and driving on a provisional licence while declaring to have a full licence will definitely invalidate your policy if there is a claim made; it's one of the first things the insurance company will look for and an easy one to check. Not only must you tell the insurer if you don't have a full licence, it is likely that the insurer will insist that a full licence holder is also a named driver on your policy. The law states that a learner driver must be supervised at all times by another driver and that person must have held a relevant driving licence for at least three years and they must be over 21 years of age.

The fourth most common lie insurance companies get told is with regards to a driver's previous claims. Many people withhold information about previous claims, neglecting to tell the insurance company about an incident. If a claim has been made in the past three years then an insurance company has the right to know about it. We realise that many drivers may innocently not mention previously settled claims, particularly if it was not their fault and it was proven so, but that is not the case. Each and every claim made in the previous three years must be disclosed. If the incident was not the driver's fault then it should have no bearing on the cost of the policy, but the consequences of being found out at a later stage are potentially expensive. Thanks to increased sharing of accident and insurance data between companies this is one lie that few drivers will get away with. We don't recommend you try it.

Number three on the list is commonly called 'fronting', where an older driver (usually a parent) insures the younger driver's car in their name and just adds the other as a named driver. At the time a policy is taken out, and there are named drivers, an insurance company will ask who the main driver is, and this is where the deception happens. A parent will often say that they are the main driver, hence massively reducing the price of the insurance policy. However, if the insurance company does some digging and finds that the older driver is the main driver on another car they may start asking questions, though we think this one must be difficult to prove. Even if the fraud is never detected, the older driver is really risking their own no claims bonus to allow the younger driver to pay less for their insurance and it really would help the young driver in the longer term to start building up their own no claims discount.

At number two is undisclosed car modifications. We've covered this in detail elsewhere, but essentially every little modification you make to your car away from standard must be communicated to your insurance company; even the likes of alloy wheels and tinted windows. Not all modifications will increase your premium, but they could invalidate your policy if an insurer discovers them after a claim is made. It is also worth remembering that an insurance company may not replace a damaged modified part with the same item. Finally, playing dumb over modifications carried out before you bought the car is not good enough. It is your responsibility to let the insurer know what has been done.

And the most common lie told by motorists to insurance companies? Apparently this is by far the most lied about item on a policy: where drivers do not disclose their motoring convictions. As it stands, all convictions in the past five years must be included on the insurance policy. This is a very easy item for an insurer to check up on and it will be looked at if a claim is made. Just as importantly, if you pick up a conviction while you are insured you are responsible for contacting your insurance company and telling them. In fairness, thanks to the littering of the countryside with speed cameras, most drivers have at least three penalty points, and that makes precious little difference to your insurance costs.

It's likely that most drivers that lie to reduce the cost of their insurance will get away with it. After all, the insurers don't have the resources to look into the history of each and every policyholder, but if there's a claim made there is a good chance that you'll get found out and this could mean a huge expense, for instance if another vehicle or person is involved and the accident was your fault, you will be responsible for all costs. Prosecution is also a distinct possibility. In summary, just tell the truth!
 

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