Consequences of lying to your car insurance company

You might think a small inaccuracy isn’t a big deal when getting a car insurance policy, but it can have serious consequences.

Giving your insurer inaccurate or incomplete information might affect your ability to claim, and your insurer may cancel or invalidate your policy.

What happens if I lie to my insurance company?

Lying to your insurer can have serious consequences. Where it’s done deliberately or dishonestly, it can amount to insurance fraud. There are a number of sanctions you could face, such as:

• Your policy could be invalidated or terminated
• Your claim(s) could be rejected
• If your insurer pays out a claim made against you, such as by another driver, it may try to recover that cost from you
• You might have to tell future insurance companies about your non-disclosure
• Other mainstream insurance companies might refuse to insure you
• Serious counts of insurance fraud can result in a custodial sentence

If you give inaccurate information or don’t answer your insurer’s questions fully, it can be treated as misrepresentation or non-disclosure. This could mean a claim you make isn’t paid in full, or at all, and your insurer might cancel your policy.

Your insurer may still take action even if the inaccurate information has nothing to do with your claim, for example, if it affected how the policy was priced or whether they’d offer you cover.

More serious cases of insurance fraud fall under the Fraud Act 2006. If found guilty of serious insurance fraud, individuals can face prosecution, unlimited fines and imprisonment.

What our motor insurance expert says

"Insurers price up your car insurance premium based on the information you supply, so it's important to make sure it's accurate.

"Minor misrepresentations, such as rounding down mileage or not declaring a minor conviction, can change the insurer's decision about offering cover or how the policy is priced.

"If you deliberately, recklessly, or carelessly submit inaccurate information, it can be deemed as non-disclosure, and in more serious cases, insurance fraud."

Matt Crole Rees Motor General Manager & Motor Insurance Expert

What wrong information could invalidate my car insurance policy?

In some cases, the information you disclose might seem insignificant.

But your insurer could invalidate your car insurance if you’ve failed to disclose relevant or important information. Particularly if the company thinks you’ve done this to get a cheaper car insurance price.

Some common types of misreported information are:

Modifications

If you’re making alterations to your car that could change how it performs or make it more valuable, it’s important to let your insurer know in advance.

Modifications such as a larger exhaust or expensive wheel trims can increase your car's value.

You should contact your insurer before you make modifications. It's likely that your policy will be recalculated and, in some cases, cost more as a result. 

This can help you decide whether the changes are worth the extra expense.

How you use the vehicle

You’ll need to make sure you use your car as you’ve described to your insurer.

What does this mean? Typically, insurers ask you, when getting a quote, what you plan on using your car for throughout your policy.

For example, you say your car is to be used solely for ‘social, domestic and pleasure’ reasons. But then, if you use it as part of your job, you could put your cover at risk.

You should also let your insurer know if you use your vehicle to commute to work, even if it’s just driving to the train station. Insurers may treat commuting differently, because regularly driving at busy times can mean a greater chance of an accident.

Who's driving the car

This is potentially the easiest aspect of your policy to overlook. But make no mistake, it can carry serious consequences if you’re not honest with the information you disclose.

You should make sure you’re the main driver of the policy if that’s what you’ve told the insurer.

Sometimes, people name themselves as the main driver of the policy when it’s actually someone else. Doing this on purpose to get a cheaper price is a form of insurance fraud known as fronting.

For example, a parent might say they’re the main driver and list their child as an additional driver, even though it’s their child who’s driving it most.

People who front a policy tend to do it to save money. Young drivers tend to pay considerably more for car insurance than those in other age groups. But costs tend to be lower if the young person is a named driver.

Your address

Different areas have different crime rates, and where you live might impact the likelihood of your car being stolen.

You could have an identical car and set of circumstances as someone who lives a couple of streets around the corner from where you live, for example. Despite this, you could end up paying different amounts based on your address and postcode.

But you still shouldn’t lie about your address - your policy might be invalidated, leaving you without cover.

Your occupation

Insurers may see some jobs as higher risk than others. This means your insurance could cost more depending on your job.

For example, those working from home or in a fixed office location may pay less for car insurance than delivery drivers. Why? Delivery drivers usually spend more time on the road, so insurers may factor this into a quote.

When you’re looking for a car insurance quote, be as accurate as you can about your profession. Giving the wrong job title to get a cheaper price could lead to problems with your policy or claims and, in serious cases, could be treated as insurance fraud.

Your marital status

Insurers ask about your marital status because their claims data may show differences in risk between groups.

Giving the wrong marital status to lower your premium counts as misrepresentation or non-disclosure in the same way as any other category on this list and, if done deliberately, may be treated as insurance fraud.

Do I need to inform my insurance company of a speeding ticket?

Not immediately, but it does depend on your insurer and policy.

Some insurance providers might require you to inform them of any fines or penalty points you receive, while others don’t. It’s a different story when your policy comes up for renewal or when you’re searching for new quotes.

It’s pretty standard for insurers to ask you about any fines, penalty points or motor convictions. And if they do, you should be honest with your response.

You might have the option to take a speed awareness course instead of receiving penalty points. Whether you need to tell your insurer depends on your policy, so check your policy documents or ask your insurer. 

Many insurers will ask about it when you renew or get a new quote, and you should always answer accurately.

How long do you have to declare points for insurance?

Points for motoring offences normally stay on your driving record for 4 years, counted from the date of the offence or, for some offences, the date of conviction. Some serious offences, such as drink or drug driving, stay on your record for 11 years.

If you get a quote with us, we’ll ask for any points you’ve had in the past 5 years so your risk profile can be assessed by insurers.

We’ll also ask you:

• The date of the driving conviction
• The driving conviction code
• The number of points for the conviction
• The fine amount
• The ban length (if there was no ban, you enter 0)
• Whether you were breathalysed
• Whether the offence was accident related
• Whether you have any unspent motoring convictions

How to get cheaper car insurance the right way

We all want cheaper car insurance! Fortunately, there are several tips to help reduce your car insurance costs:

• Fit car security devices like alarms or immobilisers and park off the street overnight. These may help lower your price with some insurers.
• Avoid modifications that are designed to make your car stand out or perform better as these may increase your price.
• Choose a higher voluntary excess. This normally reduces your costs, although it does mean that you might have to contribute more to the cost of any claim out of your own pocket.
• Consider a black box insurance policy. These can cost less for some drivers, particularly younger, less experienced drivers or those with a low annual mileage, but they may come with limits such as mileage caps or curfews, and your driving is monitored.
• Get a dash cam fitted. Some insurers offer discounts to drivers with dashcams.