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Millions lie to cut car insurance costs

Thu, 29 Aug 2013 00:00:00 -0700

New research suggests that up to 2.4 million British motorists may be at risk of invalidating their car insurance because they’re not being accurate about the information they provide.

Mystery shopping and market research specialist Consumer Intelligence carried out the study, which reveals that one in 12 of us essentially admits to lying to our car insurance companies in an effort to try and save money.

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Although one in five said they made a mistake or did not know the reason, 60% of those queried about their misleading actions said they did so in a blatant attempt to get a lower premium.

This situation is not helped by the sense of unfairness felt by many in relation to the cost of car insurance; in fact, one in 20 justify their lies as a way of reclaiming money previously paid for expensive premiums.

Unfortunately, this fails to account for the reality that in lying about their details, they risk invalidating their insurance. Which in turn means increased premiums for the rest of us if they do have an accident, via the added costs involved in a crash with an uninsured driver.

What’s more, presumably such risk-takers don’t realise that should the insurance company find out they’ve been lied to, they may well cancel the policy.

Try getting insurance with anyone else if you’ve had a policy terminated in this manner. Industry insiders say it becomes extremely difficult, perhaps even impossible.

So what do people lie about? Well, given the cost of the premium is influenced by not only the car itself, the age of the driver and their address but also job title, type of driving and the miles covered, it seems they lie about just about anything.

For example, 9% admit to changing their home address, 10% gave a lower annual mileage estimate, 15% lied about where the vehicle was parked overnight, and – most alarmingly – 14% didn’t reveal the correct number of points or convictions on their driving licence.

Some do argue it’s not always their fault. One in 10 drivers said they were unable to find the right response in the drop-down menu system used by many online insurance application forms – particularly when it came to job title and industry.

Consumer Intelligence spokesperson, Ian Hughes:

“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.”

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