Car insurance uncovered

More than 2.5 million motorists in the UK could find themselves with an invalid insurance policy by providing inaccurate information during the application process.

New research from online price comparison and switching website uSwitch.com reveals that 10% of drivers have provided inaccurate crucial information such as their age, address, no claims bonus, and previous driving convictions in an attempt to save money on the cost of their car insurance.

Aron Thompson, Head of Insurance at independent online price comparison and switching service, uSwitch.com, says: “With many consumers seeing car insurance as a grudge purchase, it’s no great surprise to see people either withhold or knowingly provide inaccurate, crucial information in order to get cheaper cover. To the consumer, this may seem like a little white lie to save money. In reality, it could end up teaching the driver a costly lesson, on average £1,636, as the provider is under no obligation to settle a claim based on a policy which is inaccurate.

“However, our research has also shown that it is not always an intentional ploy to save money as many people simply do not understand the questions asked or the implications of their answers during the application process.”

A simple journey to work could be a costly exercise with 2.3 million commuters holding back the full truth about what they use their car for. Six out of ten drivers use their car for at least part of their journey to work, yet up to two-fifths do not have sufficient cover for the commute as they have only opted for just ‘social, domestic and pleasure’ cover, not commuting.

Thompson continues: “There seems to be a great deal of confusion amongst consumers around the issue of commuting which, for example is driving to the station, leaving your car and continuing your journey by train. One reason insurers need to know if you use your car for commuting is that by leaving your car in a public place it is at greater risk from theft or damage. In this example, by not disclosing the right information to your insurer about your journey to work, your policy will be invalid and in the event of submitting a claim the insurer is under no obligation to settle the claim.”

Surprisingly, of the 15%of drivers who said that they were aware that they had provided inaccurate information to their insurer regarding the use of their car, over three quarters (76%)were seemingly prepared to take a risk, and did so in the knowledge that it could impact on the validity of their car insurance. Of those who were aware of the consequences, one in ten (9%)said they did it to keep the cost of their cover down. Over a third of people claim that it was a genuine mistake and 16% said that they didn’t understand the questions in the application.

Thompson’s tips on what ‘fibs’ can lead to invalid insurance policies:

Name of main driver
Age of main driver
Driver’s address (even moving home and not informing your insurer)
Lying about car use – driving to work or just commuting to a station
Stating that you have a garage or off-road/street parking
Lying about previous convictions such as drink-driving or speeding
Modifications to the vehicle
Length of no claims bonus
Not being honest about the engine size

Thompson concludes: “If you are looking for car insurance, check, check and double check that you are submitting the correct details to your insurance provider. Regardless of the saving, it isn’t worth the risk. Remember, if you already have a car insurance policy and your details change you are obligated to inform your insurer of any changes (such as a change in address). Driving without a valid insurance policy is a hazard to both the driver and everyone else on the road. We already have 6% of vehicles on the road totally uninsured, with a further 10% of drivers with potentially invalid car insurance this presents a serious issue for the industry and consumers alike.”