Invalidating car insurance is easier to do than many people realise. To reduce the risk of this happening, NimbleFins, data-driven personal finance experts who have compared the best car insurance companies in the UK, share five common ways that drivers unknowingly invalidate their car insurance.
“Nobody wants their car insurance claim to be rejected but it’s all too easy to unwittingly invalidate a policy. With the cost-of-living crisis stretching budgets to breaking point, we’ve put together this list to make sure drivers don’t miss out on compensation they’re owed.”
Erin Yurday, CEO, co-founder and editor of NimbleFins
1. Wrong class of use
Class of use describes the way the policyholder uses their car. For example, social, domestic and pleasure (SDP) is for drivers who only use their cars for leisure purposes such as driving to the shops or visiting friends and family.
What many drivers don’t realise is that SDP does not cover commuting or driving to a train station in order to get to work. So, if a policyholder with SDP as their class of use had an accident on their morning commute, any claim they made could be rejected.
For the policy to be valid, the class of use must reflect the activities the car is used for; in this example, this would be social, domestic, pleasure + commuting (SDP+C).
2. Not updating personal details
Car insurance premiums are based on the policyholder’s risk profile, which is determined by a number of factors, including:
– Age and occupation
– Address
– The value of the car insured
– Class of use
The greater the perceived risk of a claim happening, the higher the premium is likely to be. For example, moving to a new neighbourhood presents a different risk of car theft.
This is why it’s important for the policyholder’s details to be accurate. If any of those details are wrong, the policy won’t be an accurate representation of the risks faced by the driver – automatically voiding the policy.
3. Underestimating mileage
Insurers often ask about annual mileage which helps them calculate risk. While insurance providers don’t expect policyholders to be 100% accurate, they do expect estimates to be within reasonable parameters.
Policyholders who grossly underestimate the number of miles they cover can invalidate the entire policy. Based on that, NimbleFins encourage all policyholders to think about the journeys they make and how these add up in terms of miles.
4. Letting unnamed drivers behind the wheel
Car insurance only covers the vehicle and named drivers on the policy – nobody else should be driving the car, not even in an emergency.
The only exception is if another driver has car insurance that includes ‘driving other cars’ (DOC). However, it’s important to note that DOC only provides third party insurance, regardless of the level of cover held by the driver. For example, if someone has comprehensive insurance with DOC cover and has an accident while driving a friend’s car, the insurer will only pay to repair third party property, and the car being driven will not be covered.
5. Misrepresentation
Misrepresentation is when the policyholder intentionally misleads the insurer with the aim of getting cheaper car insurance; a prime example of this is the practice known as fronting.
Fronting generally happens when an older more experienced driver claims to be the main driver when they are not. In most cases, the real driver is a younger, less experienced family member.
Policyholders can also mislead insurers by failing to disclose facts that the insurer needs to know about and that might affect the premium they were offered. This includes having penalty points or making a recent claim.
Depending on the specific circumstances, misrepresentation and non-disclosure can be classed as insurance fraud which could lead to prosecution and imprisonment.
Consider needs carefully to avoid invalidating car insurance
The overall message from NimbleFins’ CEO is that:
“With all contracts, the devil is in the detail. Car insurance policies are no different and policyholders need to pay attention to the terms and conditions set out or run the risk of voiding their cover.”
Whether drivers are buying their first policy or renewing, NimbleFins strongly recommend consumers shop around to find the best cheap car insurance for their needs and budget. Car insurance is a hugely competitive market and even though premiums are starting to creep up, there are still deals to be had. A useful place to begin is with the list of the largest car insurance companies.
Media Contact
Company Name: NimbleFins
Contact Person: Erin Yurday
Email: Send Email
Address:NimbleFins Limited Ground Floor 45 Pall Mall
City: London SW1Y 5JG
Country: United Kingdom
Website: https://www.nimblefins.co.uk
