A new law has come into effect that will clarify what a consumer must tell their insurance firm before taking out a new policy. The Consumer Insurance (Disclosure and Representations) Act 2012 has come into force to relieve the consumer of the duty to disclose information meaning insurance companies would have to actually ask for specific information if they want it.
Staysure, an insurance company specialising in people ages 50+ has found that many older drivers are bending the rules to keep car insurance down and has also warned that despite these changes to the law, deliberately misleading an insurer could still result in invalid policies.
Drivers asked admitted that they would consider stretching the truth to lower the cost of their policy and said they would consider using a variety of methods including; carrying out multiple searches for quotes using different criteria to see which was cheapest, looking to see if insuring a second driver would make the policy cheaper – regardless of whether they'd actually use the car and not declaring points for speeding or having been involved in accidents.
Head of Car Insurance at Staysure Jon Kirk, said; "The new legislation is set to make it easier for consumers and emphasises that the onus is on insurers to ensure they ask customers the correct questions when providing quotations. However, while it is understandable that consumers want the best deal on their car insurance, particularly if they have received a price increase on their renewal it’s crucial drivers are completely honest with their insurer about every aspect of their policy when purchasing or renewing cover".
Do you agree that the responsibility should be on the insurer?
cars.aol.co.uk/2013/04/08/older-drivers-admit-to-bending-the-truth-to-keep-insurance-costs/
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It's up to the insurer to ask the right questions to establish the baseline risk. Lying about points or claims history rightly buys one a packet of trouble
If an insurers system rates me differently according to whether I describe myself as professional or managerial then they're asking the wrong questions and can expect me to use the better quote.
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I think you'll find that if you have a big claim, perhaps where there is a loss of life then you may regret not being totally upfront.
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Adding my parents as named drivers on our policies still reduces the cost, even though I've been driving for 25 years. I can count on the fingers of one hand the number of times they've driven either of our cars in that time; am I 'bending' the truth by still adding them to the policies?
Mind you, I remember that until the early nineties my mother's car was always insured fully comprehensive, any driver. I'm not sure that it's still possible to buy an 'any driver' policy through normal retail channels is it?
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Nicole is on my policy, being female it reduces the price. She drives the lancer maybe 5 times a year max. Being on the policy does not mean it has to be driven, there is no stipulation about usage.
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>> Nicole is on my policy, being female it reduces the price.
>> She drives the lancer maybe 5 times a year max.
>> Being on the policy does not mean it has to be driven, there is no stipulation about usage.
>>
SWMBO was on my policy even thought she has not driven for 30+ years.
Seems to make no diffence now.
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I'm a named driver on my wife's policy and it makes a small saving. I drive it maybe less than 3 or 4 times a year.... but how else could I legally drive it? Like filling it up with petrol for her, taking it for a longer run to top up the battery when it was needed, sorting out a new battery recently, etc.
I am also a named driver on step sons car and that reduced insurance by maybe £30. It was still a lot more than that. But if I needed to drive it or move it, then being insured would be necessary. Not cheating anyone.
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"Our" car is registered to SWMBO so I am a named driver on her policy. Goes back years to when I ran a company car & she had her own car.
NCB earned was always transferred; even when we bought our new Fabia in Spain , we were able to use her NCB, so she was the legal owner.
Mind you she loves driving and we do share it, so no fibs there.
We have found TESCO the cheapest by a good few bob, now we are back here, but latterly in Spain we used Linea Directa, whose NCB was accepted by TESCO, unlike some others we investigated.
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>> I'm a named driver on my wife's policy and it makes a small saving.
>> I drive it maybe less than 3 or 4 times a year.... but how else could I legally drive it?
By being insured any vehicle on your own policy (as I am, at no additional cost, provided I have owner's permission).
It's only third party cover, but legal.
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Many insurers have withdrawn this cover - you need to make sure you have read the Ts&cs of you policy to confirm you have cover. Many also stipulate now that the car must be insured in its own right.
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>>– regardless of whether they'd
>> actually use the car and not declaring points for speeding or having been involved in
>> accidents.
Local case with an R8 that was insured - the insurers repudiated as the owner hadn't declared previous accidents, one of which had happened when he was allegedly drunk...
tinyurl.com/bvarzom
Oh, a bakkie is a pick-up truck.
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It sounds as if they themselves are bending the truth, by branding all attempts to lower insurance quotes as equally fraudulent.
Managerial v professional isn't fraudulent, it's a matter of interpretation of two ill-defined concepts.
Named driver doesn't mean actually using the car.
But obviously hiding a high risk main user behind a fronting safer driver is fraud.
It's very similar to the tax evasion/avoidance distinction.
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Stretching or bending the truth =LYING!!!!
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Stretching or bending the truth = Differing interpretation of a badly worded question or statement, from where I am looking.
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Cliff has it right. If a question is open to significantly different interpretations, as in Bromp's example, it's a bad question. Most insurers' idea of jobs seems stuck in the 1960s - fine if you're a milkman, a doctor or a typewriter repair man, but hopeless for the jobs many of us do these days, like mine in IT presales.
But answering 'no' to 'have you had a conviction?' when the true answer is 'yes' - no interpretation necessary; that's just lying.
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I think one of the contributing factors here is the black and white of online applications and the abundance of small print that very few of us read.
When I first started driving, I got my policy from the Swinton office where you sat down and conversed in a verbal manner. I daresay in those days the broker maybe also had more of an "influence" over the insurance company if putting a lot of business their way.
If the insurance company doesn't ask the correct questions its only got itself to blame, however I believe the vagueness suits the Ins Companies as a get out clause!
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Insurance is all about assessing risk and then spreading it over a number of people. Most people's houses don't burn down, but one might, so we all share the cost by contributing our insurance premiums.
The essence of insurance is uncertainty. Once you know for example that one of us is a pyromaniac, or someone else makes fireworks as a hobby, then you are moving away from uncertainty.
By developing more and more detailed risk assessment criteria, insurers are trying to whittle away uncertainty, but risk in the end destroying the very basis on which they operate.
Once they can predict accurately who will develop which illnesses, who will crash his car, who will live to 100, etc, then insurance becomes one of two extremes - impossible, or unnecessary.
You might just as well have a system where you give your credit card details at the start of the period, and at the end of the year they charge you a premium of exactly the value of your claims.
It would be absolutely fair, but it wouldn't be insurance. They don't seem to realise that they need poor risks as well as good for it to work.
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>>They don't seem to realise that they need poor risks as well as good for it to work.
You need to rephrase that a little;
The individual insurer recognizes that the insurance industry needs poor risks as well as good for it to work. They just don't want to be the one who takes it on.
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>> >>They just don't want to be the one who takes it on >>
Yes, very true. So there's another contradiction.
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>> >>They don't seem to realise that they need poor risks as well as good for
>> it to work.
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In reality they just want the good risks, they want us all to think there is a risk of the event happening though.
Why so many idiots bought payment protection insurance . . . . . Those really at risk can't buy it.
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I am not really clear what difference this will make. Its never been a blanket non-disclosure is bad, its always been about material non-disclosure. Where "material" is defined as some fact which, had the insurer been made aware of it, would have caused them to alter their treatment of the risk.
I'm not sure what has changed in the real world.
It has always been your duty to complete the proposal stage honestly and accurately, that continues.
If anything changes, health, conviction, use, etc. etc. it has always been your duty to disclose that change. This will remain as it is.
I can imagine some changes in the small print, and I can see additional small print at renewal. But if you rely on not being asked as a defence for not disclosing, then you may very well live to regret that approach in the event of a claim.
Finally, if you truly believe that this will protect people, and if you truly believe that until now people have been unfairly treated and their claims rejected, and if you now really believe that more claims will be paid, where do you think that additional money will come from?
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It's much simpler in Sweden. They take the reg number, and that gives them all the car info, and your personal number, and that gives them your name, address, and age. The only other questions were the number of accidents (no proof asked for), and annual mileage. That's it. The insurance covers any driver, although there is a higher excess if if it's a young driver that then has an accident.
They have to auto renew by law though, so if you don't pay the renewal invoice, they keep hounding you until paid or cancelled. Plus it swaps over automatically to 'garage' insurance if you sorn the vehicle (the DVLA is linked to the insurers computers), and they repay you pro-rata for the unused part of the premium. On un-sorning, it automatically reverts back to the full insurance, and you recieve an invoice for the remaining premium.
On sorning the car, you also get back the road tax pro-rata automatically, and on un-sorning again you get an invoice for road tax up till the end of the tax period.
Last edited by: Dave on Fri 19 Apr 13 at 13:26
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>> It's much simpler in Sweden.
What's the typical annual premium there?
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For my rusty old Felicia it's about £150 for 3rd party only. I didn't bother asking for fire and theft as the excess will be more than any possible claim. But for the new pickup I had before it was about £500 for the full monty.
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>> Where "material" is defined as some
>> fact which, had the insurer been made aware of it, would have caused them to
>> alter their treatment of the risk.
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Yes, but their treatment of the "risk" is a statistical one, not a "real" risk, so it's not necesarily very obvious which factors would cause them to review the risk or not.
It's obvious that if you keep crashing your car you are an insurance risk.
But it is not so obvious that putting you car in the garage increases the risk (although it is possible to concoct a line of reasoning that sounds plausible).
It is obvious that putting in a more powerful engine or re-chipping it might increase the risk, but why does having non-standard wheels increase the risk?
One suspects that merely asking a question increases the risk - people who ask whether they are covered for particular eventualities may well, statistically, be more likely to make a claim.
People who shop around are probably riskier.
Perhaps not having made a claim in 40 years makes one riskier - complacency factor?
Perhaps someone who has witnessed a major smash becomes safer, who knows?
It's this sort of thing that makes it very difficult for ordinary people to assess what is material.
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Bending the truth to keep insurance cost down - Bromptonaut
