The price of motor insurance has shot up by over 20% within the past year according to Consumer Intelligence – with average premiums of £929.
This means many motorists may be looking for ways to get cheap car insurance – but keeping secrets from your insurer or downplaying the risk factor can prove costly. When it comes to applying for insurance, you must be honest with your insurer. This applies to the information you give in your initial application, along with keeping your insurer in the loop over any changes in your circumstances once your policy is active. This advice applies across all types of insurance including motor, home and travel insurance.
If you do something, even inadvertently, to invalidate your insurance, an AA spokesperson warns that: “your insurer can take steps to cancel your policy”. And if your policy is cancelled, “this is something you’ll have to declare when you shop around for new insurance and could act as a red flag for some providers”. In the long term, this means it may be more difficult for you to get insurance and you may have to pay more for cover.
Here are seven reasons why your insurance can be refused, voided or cancelled.
1. Failing to report all accidents
If you have a minor scrape in a supermarket car park, and you and the other driver both get out and agree "no harm done", and neither of you is going to make a claim, you might think that’s the end of it. However, you should always report even minor accidents to your insurer, as it’s one of the terms and conditions of your policy.
If the accident comes to light at a later stage, say the other driver takes your registration and decides to make a claim against you through their insurer, your insurer will want to know why you didn’t tell them.
2. Making modifications to your car
Having your windows tinted or adding a roof rack to your vehicle may seem a fairly innocuous modification, but your insurer may not see this the same way.
When you’re applying for motor insurance, you’ll be asked if your car has any modifications, and it’s worth checking the drop down list before ticking the ‘no’ box. Modifications can make your car more attractive in terms of its value, or stand out to potential thieves, which is why insurers want to know about any changes that you, or a previous owner, may have made to the original model of your car.
If you make any changes to your car while the policy is active, once again, it’s your responsibility to let your insurer know.
3. Changing your job
Insurers tend to view some jobs as more ‘high risk’ than others and if you’re in a sales job and constantly on the road, it follows that insurers may consider you more of a risk than someone who drives two miles to work at the local bank every day.
While tweaking your job title is legitimate, bare-faced lying to try and secure a lower premium counts as fraud and can be a fast track to having your insurance cancelled.
4. Moving house
If you forget to tell your insurer you’ve moved house, your policy could be invalid. This is because insurance is priced on risk, and depending on the area you’ve moved to and the crime statistics, your insurance company may decide your new address presents a higher, (or lower), risk in terms of potential claims. If you live between two addresses (for example, you work away from home during the week) tell your insurer, as it’s usually the address where your vehicle is kept overnight most often, that they’ll be interested in.
Of course, any change made to your policy mid-term may mean paying a car insurance admin fee. This can be an average of £28, according to Defaqto, but could be a lot higher. Of course, this is still likely to be far less than the amount you'd have to fork out if your car insurance refuses to pay out after an accident.
5. Driving long distances
How far you drive is one of the factors insurers use to calculate your premium. If you claim to be a low mileage driver, which may mean a cheaper premium, but clock up thousands of extra miles over the course of a year, your insurer may have something to say in the event of a claim.
While it’s impossible to accurately predict how far you’ll drive in any year, it’s not worth second guessing when you’re asked during the insurance quotation process.
You can find your previous year’s mileage on your last MOT certificate and if your driving habits have changed dramatically, perhaps due to a new job with a lengthy commute, you should tell your insurer.
6. Giving another driver the keys to your car
While you’re unlikely to hand your keys to random strangers, there may be times when you want someone else to drive your car. However, if they’re not listed on your policy, this could mean any claim can be refused, in the event of an accident.
If you take your car to a garage for a service, repairs or MOT, the mechanic may need to drive it on the road to check their repair work, or even drive it to the local MOT test centre. In this instance, the garage should have adequate insurance for this purpose.
However asking a friend to take the wheel of your car and drive you home from the pub, (provided they’ve not been drinking), could backfire. If they’re not a named driver on the policy, and they have an accident, your insurer won’t pay up. If the other driver has their own comprehensive motor policy, this may may cover them to drive other cars, (with the owner’s permission), but this isn’t standard on all policies. And, even if cover is included, it’s usually only on a third-party basis.
8. Fronting
Adding an experienced ‘second driver’ to your policy can be a way to cut the cost of insurance, even if they don’t end up actually driving your car. Having them listed on the policy, can help cut the risk factor in the eyes of an insurer, however, you must be honest about who the main driver of the vehicle is.
If you’re the main driver, but you put someone else's name down instead, (to try and save money), then this is "fronting", it’s illegal and can mean your policy will be voided and any claim rejected. A typical example of this is if a parent puts themselves down as the main driver on their inexperienced child’s car to help secure a cheaper price for their policy.
