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Millions of insurance policies invalid?

Everyone knows that times are tough at the moment and motoring costs have never been steeper. Attention may focus on the escalating price of fuel but drivers will also look to cut costs when it comes to other factors like insurance.

Everyone knows that times are tough at the moment and motoring costs have never been steeper. Attention may focus on the escalating price of fuel but drivers will also look to cut costs when it comes to other factors like insurance. But now a study by survey firm, Consumer Intelligence, has shown the lengths some UK drivers will go to in order to reduce their costs and how this might just invalidate their insurance policy.

The survey shows that up to 2.4 million car insurance policies could be invalid because of inaccuracies in the information given to insurance companies by drivers. This could clearly have serious consequences and not just for the drivers concerned. Where these inaccuracies are discovered, insurance companies could refuse to pay out and that could impact any third party in an accident with such a vehicle. According to the survey, around 8% of drivers admit deliberately providing incorrect information to their insurer. When the survey asked why they did this, 60% said it was to achieve a lower premium. Around 20% said they had simply made a mistake or did not know the correct answer. A militant 5% said they deliberately provided incorrect information to compensate for previous premiums they regarded as too expensive.

The study went on to quiz drivers on what details they lied about. This found that 9% faked their home address to avoid postcode premium hikes, 10% deliberately underestimated their mileage, 14% omitted convictions and penalty points and 15% fibbed about where their car is parked overnight. Not all inaccuracies were down to the driver, however. Insurers set premiums according to a driver's occupation and many simply could not find an accurate description of their job title on the lists.

A spokesman for the survey company commented: "Many consumers are struggling financially and it is understandable that they would want to try and cut their bills wherever they can. However, if they do not provide the right information to insurers they are putting themselves at risk. If they make a claim they may find that the policy won't pay out because the information they provided doesn't add up. One of the key principles of insurance is 'utmost good faith.' That isn't just for insurers; it is really important that consumers play their part in this."

If motorists are caught out when making claims and their insurers refuse to pay up, they could be left holding a hefty bill. They could also find it next to impossible to obtain insurance in the future and even face prosecution for driving without insurance.

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Back to August 2013

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