Encouraged by lurid headlines about the latest insurance scams a lot of people have formed the opinion that insurance companies are run by benevolent mugs who are ripe for the taking. The truth could not be more different; we're talking about sharp, intelligent people who are in business to make a profit, and who have all the facilities of specialist legal advisers behind them. If you have a valid claim they will usually meet their contractual obligations to the letter; but if they find something to invalidate your claim, you may well find yourself saddled with enormous costs, and with no redress. Here are some of the usual obstacles that policyholders can fall over.
Bending the Truth
Some people set out to deliberately give false information to the insurance company in order to get a lower premium. The usual ones are lying about age, failing to declare prior accidents or convictions, or claiming a non-existence no claims bonus. How do they find out? Easy. As soon as a claim comes in they can check their databases, which will tell them the claims and convictions histories of every driver in the UK. Age? Dead easy, they ask for your driving licence details and the licence number contains a code which gives away your date of birth. No claims discount? They will ask you for proof from your previous insurer.
Some people of course make honest mistakes when filling out a proposal form but the results can still be the same. The message is: be accurate and check your facts if you have the slightest doubts before submitting the form. If you realise afterwards that you have given incorrect information inform the insurance company immediately; they may charge you an extra premium or a fee for altering their records but that would be better than having a claim refused.
Failure to Declare Material Facts
You are expected to inform the insurance company of any factors that you believe should influence their decision on whether or not to insure you, or what they should charge you as a premium. You may not think, for example, that your slightly defective vision, the small modification you made to the car's carburettor, the minor criminal conviction you picked Up a couple of years ago, are of no importance, but these are just the kind of things that can give an insurance company an excuse to invalidate your insurance policy. If in doubt, tell them, and do so in writing.
Change of Circumstances
During the life of the policy you may change your occupation, you may change your address. An alteration to your work patterns may mean that your car is parked regularly in a riskier area. You may pick up a motoring or criminal conviction, you may have an accident which you pay for yourself rather than make a claim. It is vital that you inform your insurance company immediately that these or any similar circumstances ever crop up.
Duty of Care
You are expected to take reasonable precautions to avoid a loss to the insurance company. If you park your car regularly in a street in which other vehicles have been vandalised, you will not necessarily be able to rely on your insurers to put right any subsequent vandal damage to your car, because they may decide that you have been negligent in leaving it there. If a burglar sees your car keys through the window, smashes the window and uses the keys to steal your car, your claim under the theft clause may be refused because you did not take sufficient care of them. If you leave your car unlocked on a garage forecourt whilst you pay for petrol, or leave a window open whilst it is parked in a supermarket car park, you may well have a struggle to get your insurance company to reimburse you if it is not there when you get back.
Not every insurance company is so keen to refuse claims, and you are entitled to approach the Insurance Ombudsman if you feel that you have been unfairly treated, but thousands of motorists every year have claims turned down because they have violated one or more of these rules; a little care can ensure that you are not amongst them.