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As drivers continue to feel the pinch of recession insurance groups warn about the dangers of not telling the truth when taking out car insurance. Every claim is now being closely scrutinised as a result in the upsurge in fraudulent claims, as explained in my recent crash for cash fraud item. As a result lies or mistakes made at the time of proposal is causing claims to be rejected so great care needs to be taken when completing proposals or you may not only find a claim rejected but you’re also prosecuted for fraud. Some of the most common lies told are:

Incorrect Main Driver:  Where a child, spouse or sibling have only recently passed their driving test it is tempting for an experienced driver, with a no claims track record, to apply as the main driver of a car when it is in fact the ‘named driver’ who is the main driver. Obviously when a named driver has an accident it initiates a full investigation. If the insurer believes that the named driver is in fact the main driver he may refuse the claim in total or in part. What is often misunderstood is that if the insurer is suspicious and refuses to pay the onus is on you to prove that the named driver is not the main driver rather than on the insurer to prove his suspicions. If a named driver is found to be the main driver he can be prosecuted for driving without insurance which can result in a hefty fine or 6 penalty points. The ‘main driver’ could also be prosecuted for insurance fraud and could end up with a prison sentence.

Previous Claims & Convictions: Failing to tell your insurer about a previous accident or any convictions could invalidate your policy. If you’ve been involved in an accident in the last 3 years, whether it was your fault or not, must be disclosed. You must also inform him of any motoring convictions in the past 5 years. Failure to disclose this information could invalidate your policy.

Modifications: Probably not such a problem amongst my readers, not too many will ‘chip’ their Ford Escort to enable the car to generate 240bhp, but any modifications that may affect the speed or handling of the vehicle needs to be disclosed. If you fail to disclose anything that could affect the price of the car, insurance premium, or the decision of the insurer to cover you, you could be acting fraudulently and the insurance company has the right to cancel the policy. Even ‘negligent misrepresentation’ where you accidentally mislead your insurer could affect your policy. This could happen if you buy a second hand car and are not aware of any modifications.

Business Use: This one I have mentioned a lot as the police have a whole new set of instructions to obey if they suspect that the car was being driven on business. As a result of their investigations you may find that your claim is rejected if the car was found by the police to have been driven on business and you weren’t insured for business use. This would include a daily trip to the post office to take the post. New health and safety regulations regarding the use of vehicles for business makes this a very contentious area. Declare the use or you could have a claim rejected.

False Injury Claims: In the current climate it is tempting to claim for injuries that you didn’t receive following an accident with the most popular being whiplash. Unfortunately this is the way that fraudsters make their money so the insurance companies are now taking a very close look at claims for injury. See previous posts on how to avoid becoming a victim of a staged crash. Making a false claim can result in prosecution, a large fine or even a prison sentence. By Graham Hill