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Tell the truth or your insurance could be cancelled

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04/05/2007

It is estimated that 10 per cent of motorists lie to their insurance company* when they insure their car in order to get themselves a cheaper quote. Now insurance specialist Admiral is warning all drivers to tell the truth or risk losing your cover.

Although the magnitude of lies people tell their insurer varies, anyone who is found out runs the risk of having their insurance cancelled, no matter how 'big or small' the lie. Admiral, like other insurers cancels hundreds of policies every year because they find out someone has lied when they bought their insurance.

Admiral managing director, Sue Longthorn, said: "Some people think that by telling a small lie they can get a cheaper quote. In reality they are committing fraud. An insurance policy is a legal contract so its vital that you are honest, or that contract can be claimed invalid and cancelled."

So what sort of lies do drivers tell their insurers when buying insurance? Admiral has compiled a list of the five most common ways people lie to insurers:

1. Withholding motoring convictions. By far the most common reason why policies are cancelled. People with motoring convictions tend to be bad drivers and so pay more for their insurance. If you have had a motoring conviction of any kind in the last five years, you must tell your insurer.
   
   
2. Undisclosed modifications to the car. Modifying a car so it affects its performance or appearance means it is no longer a standard model, and therefore a different risk. You must tell your insurer of any modifications either you or a previous owner has made to your car.
   
   
3. Insuring a young person's car in the name of an older driver. This is known as fronting and usually involves a parent insuring their child's car. Young people are a higher risk for insurance companies because they have more accidents. You must tell your insurance company who will be the main driver.
   
   
4. Withholding previous claims. You must tell your insurer of any accidents or claims you have had in the previous three years, even if the claim is settled or wasn't your fault. The insurance company needs to know your insurance history.
   
   
5. Unacceptable licences. Some insurers will only insure someone with a certain type of licence. Admiral will only accept full licences from the EU and a few other countries. If you have a provisional licence you must tell your insurer and have a named driver with a full licence on your policy.

Sue Longthorn, said: "Insurance companies have become much better at finding out if motorists are lying, and we have a number of ways of investigating anyone we think might not have told the truth.

"We are not trying to catch people out, but people must realise they have to be honest with their insurer. They might think a little white lie is harmless, but it could end up costing them a lot more in the long run."

*According to research by the Motor Insurance Bureau.

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