The five fibs you should never tell your insurer
Telling a few white lies to cut the cost of your car cover might seem tempting right now; even Jeremy Clarkson has joked that it's a fair idea! But even the smallest porkies could have serious consequences. Here are five lies everyone should think twice about telling...
Now the recession is in full swing, few British wallets are feeling as full as they did a few years ago. With that in mind, the appearance of your car insurance renewal quote might be enough to have you reaching for the scotch.
Surely there must be some way to cut the price of your premium? Maybe bending the truth a little wouldn't hurt…
Sadly, the truth is that telling your insurer any sort of lie - no matter how small - could have very serious consequences.
If you tell any of these five fibs to your insurer, you may be refused an insurance payout when you need it most, might face a massive fine and could even end up with a prison sentence!
1. Fronting
When Jeremy Clarkson joked in an episode of BBC2's Top Gear that parents should simply claim to be the main drivers of their children's cars, he probably didn't intend for this to be taken as serious car insurance advice.
Fronting - the practice of an experienced motorist fraudulently insuring a vehicle that a younger person will drive - is actually no laughing matter. If you're caught, your insurance policy is likely to be deemed invalid and any claim you make could be rejected.
Young people found to be fronting may be prosecuted for driving without insurance. Conviction for this offence can result in a hefty fine or six penalty points being added to the driver's licence - which, in the case of a newly-passed individual, would effectively mean an automatic ban.
The older person involved in any case of fronting is also likely to face punishment. He or she could be prosecuted for insurance fraud and may even be sent to prison if found guilty.
2. Keeping quiet about modifications
If your car is modified, it will probably cost more to insure than a 'standard' vehicle. This is because many insurance companies' calculations show modified motors are more likely to be involved in accidents, and may cost more to repair if they are damaged.
Failing to tell your insurer that your car is modified can be classed as fraud if you have withheld the information on purpose.
Remember: if you deliberately fail to disclose any facts that may affect the price of your car insurance premium or your company's decision to cover you, it has the right to cancel your policy completely in the event you need to claim.
Even 'negligent misrepresentation' of your vehicle (where you mislead your insurer by accident) can create problems if you need a payout later down the line.
This might happen if you buy a second car and are unaware modifications have been made to it.
3. Using your car for business purposes
If your car is insured for personal use, it is crucial that you don't begin to drive it for business purposes.
If you used your vehicle as a minicab or to provide delivery services, for example, you would risk being uninsured in the event you had an accident.
This is because using a car for business, rather than personal, reasons means it is likely to be driven longer distances, parked in a wider variety of locations and perhaps used more frequently.
These are all factors that would, if your insurer knew about them, affect the price of your premium.
4. Being dishonest about previous claims and convictions
Failing to tell your insurer that you have previously had an accident or been convicted of a driving offence could also invalidate your policy.
If you've been involved in an accident within the past three years - even if it was not your fault - you must make sure your insurer is informed.
Likewise, any motoring convictions you have had in the past five years must be disclosed to your insurer.
5. Whiplash claims
Finally, be aware that 'cash for crash' scams are now a very real danger to all drivers.
Groups of fraudsters plan and execute accidents deliberately, then claim for personal injuries - usually whiplash - on the other person's insurance. Most often, it is rear-end bumps that are staged.
It's crucial to try and protect yourself from falling victim to this kind of con. Being involved in any sort of accident is likely to inflate the cost of your car insurance in future, so when you're out and about always make sure you leave plenty of distance between your vehicle and the one in front.
However, you must also resist the temptation to claim for a personal injury yourself if you haven't genuinely been hurt as the result of a crash.
Making a false claim could lead to prosecution, a large fine or even a prison sentence.
Contracts based on trust
All drivers should remember that insurance policies are contracts based on trust. It is your responsibility to give your car insurer accurate and honest information, and you are obliged to reveal anything which may affect the insurer's decision to offer you cover.
In the end, insurance fraud is likely to be a false economy. Remember: if you are refused a payout when you need one, every penny you've spent on cover will have been wasted!
What's more, the long term effects of insurance fraud can be severe. Not only could you lose thousands of pounds if your vehicle is written off; you may find it impossible, or incredibly expensive, to get car cover in future if you have an insurance policy cancelled.
Cutting your costs
In my view, the most simple and effective way to beat your car insurance renewal quote is to shop around for a better deal. By using an online comparison service, you could shave hundreds of pounds off the price of your policy in minutes.
If you'd like to read more money saving tips, check out the articles Six ways to drive down your car costs and Six things that affect car insurance costs.
**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within this article/our website, but to conduct their own research and seek independent advice about the financial products they purchase.**
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