Honesty is the best motor insurance policy

A car insurance quote request.
A car insurance quote request.

Finding room in the household budget to pay the yearly car insurance bill can be at the root of many financial headaches.

But that’s no excuse for a significant proportion of people trying — and failing — to get away with paying less than they should for their motor cover.

Nearly 3,500 people are being caught out every week after lying — or deliberately leaving off information that would have made their cover more expensive — on their motor insurance applications, the Association of British Insurers (ABI) has found.

Dishonest applications often revolve around people lying about their age, their driving experience or where they live, or trying to hide previous driving convictions.

These false claims were exposed by insurers either at the point when the motorist had applied for a policy, or after they’d managed to get cover and then had gone on to make a claim.

Sometimes, these lies have involved people pretending that their ‘no claims bonus’ was longer than it really was. Or, perhaps the driver has claimed to have kept their car safely locked up in a leafy, low-crime suburb rather than parked out on the street in a busy city. Other cases have involved a practice known as ‘fronting’, which can happen when middle-aged parents pretend they are the main driver of a car, rather than their more-expensive-to-insure young adult children.

These aren’t harmless fibs, though. The attempts of some people to get cheaper insurance by lying are estimated to add around £50 to the price that everyone pays for cover.

Applications were defined by the ABI as being fraudulent by insurers if someone suspected of lying failed to provide, when challenged, any further information to back up what they were claiming or they suddenly withdrew their application with no credible explanation. They were also classed as fraudulent if the applicant did not reply to the insurer’s attempts to get in touch or, without a decent explanation, accepted a substantially lower settlement for an insurance claim or a much higher insurance premium.

AA Insurance, which operates its own fraud detection unit in Cardiff, says that it weeds out around 75 dishonest insurance applications a week.

Janet Connor, managing director of AA Insurance, says: “Clearly people can make innocent mistakes, but deliberately attempting to falsify information provided to insurers isn’t a victimless crime.

“Some people may think that it’s acceptable to be ‘economical with the truth’ to reduce their premium, but the likelihood is that even if they successfully obtain cover, they will be detected sooner or later.

“In the event of a crash that hurts someone else or damages their car, the policy will have to be voided, yet the insurer will still need to meet the third party costs. That adds around £50 to the cost of every car insurance policy, according to the ABI’s figures.”

One example of a case seen by the AA involved a man aged in his early 20s who was involved in a collision while driving a high-powered car. When the police checked his insurance record, they found he’d claimed he had 12 years’ worth of driving experience and was 42 years old. AA Insurance says the man would have found it difficult to obtain insurance for the type of car he was driving if he had told the truth.

In another case, a woman had claimed she kept her BMW parked in a garage in a Home Counties village. But when making a claim on her vehicle after it had been damaged while parked, it emerged that she was actually keeping the car in a busy London street. The AA says her premium was around two-thirds less than she should have been paying.

Among other moves to remove the opportunity to make fraudulent applications, the ABI has been helping to develop a data-sharing initiative called MyLicence, to enable the industry to obtain driver information such as motoring convictions and penalty points directly from the DVLA.

Under the initiative, people searching for car insurance quotes may be asked to provide their 16-character driving licence number. This will then be matched for accuracy against information on the DVLA’s records, removing the consumer’s opportunity for errors — whether they’re made by accident or not.

HOW CAN YOU... PREPARE YOUR HOME FOR WINTER COLD SNAPS?

Burst pipes, damaged water tanks and overflowing gutters can all add to the list of winter expenses as temperatures fall.

Here, British Gas’s home services engineers have some tips on how to protect against potentially costly damage:

* Bleed your radiators. If radiators have cold spots, this is evidence of air in the system. Bleeding them will help them to work more efficiently. This can be done by turning the system off and then turning the radiator key until the air stops and water runs consistently. Bleeding the radiator may result in pressure dropping. If you have a pressure gauge, make sure the boiler is at the right pressure and top up as necessary.

* Block the breeze. Make sure all of your home’s windows and doors seal properly to stop warm air escaping.

* Love your boiler. Ideally, make sure it’s working properly before the winter freeze really sets in.

* Wrap up your water tank and insulate hot water pipes to help conserve heat and save money.