When it comes to car insurance, we all want to save a buck or two and get the best price possible. Unfortunately there are a large number of people willing to overstep the boundary lines and declare false information to the insurance companies, in an attempt to save a few dollars on their premium.
Although it seems as harmless as sneaking food into the cinemas, there is a great risk that in the event of an accident or theft, the insurance company may decline your insurance claim. There is no point in playing Russian roulette with car insurance.
Heavily maligned for rejecting insurance claims, people don’t realise that even a seemingly trivial non-disclosure means a greater risk for the insurance company. They have the right to charge a suitable premium to cover their risks and when they are not fully informed it could result in a loss to their business.
Just as you would like to be informed if a beach you’re swimming at has an extensive history of shark attacks, the insurance company would like to know about all potential risks before they hit the waves.
To prevent a situation occurring where the insurance company may have to decline your insurance claim, it is always better to be honest and disclose all of the necessary information about your situation. Here are a few tips to keep you out of trouble:
- Disclose all criminal convictions, although they might not seem relevant or are embarrassing to reveal.
- Advise them of the correct location at home where the car will be stored; be it locked garage, carport, driveway, front lawn or the roadside kerb. Don’t just say the car is being kept in a locked garage just because you have one. Make sure it will actually be stored there and not on the lawn because the garage is full of boxes or being used as a playroom.
- Put the main driver down as the person who will actually be the main driver of the car, not another person to cover when the main driver is young or inexperienced. When a new car is purchased and insured in an adult’s name with a 17 year old magically put on the policy, its pretty obvious to the insurance companies what is happening. Trying to save a few bucks or trying to get insurance when you don’t qualify is just not worth it.
- Disclose the names of all people who will be driving the car. Do not attempt to avoid putting someone who will knowingly be driving the car on the policy, when you know they have a chequered driving history.
- Reveal every single traffic offence, no matter how minor it is; and disclose all speeding fines, loss of points, licence suspensions and other major incidents. Most people can’t remember their full driving history, so it is always wise to obtain a copy from your local motor licensing department to make sure all traffic offences are disclosed.
- Advise the insurance company of all modifications to the motor vehicle. This should include everything that is not factory standard. Different mods could make the car more attractive to thieves and present a greater theft risk, or they could change the performance or safety of the vehicle and increase the likelihood of an accident. Non-disclosure of modifications is a serious issue for insurance companies and needs to be addressed.
- Check to make sure that the insurance company has the correct car details on file. Some car manufacturers can make between 10-20 versions of the same model car, with small differences such as A/C, electric windows, sports bumpers or extras packages. Advising of the basic no frills purchase rather then your kitted out machine to save some money could be disastrous if the car is written off.
- Declare all of your past insurance history including rejected claims, cancelled insurances and whether you have been declined for insurance.
- Reveal what the vehicle will really be used for and whether it is for business or personal use. This is a category that many people feel they can lie about to get away with a cheaper premium or claiming some of the cost as a tax deduction. But the true use is important, as is knowing what may be carried inside the vehicle if it is used for business purposes.
- Advise the insurance company of your nature of work, regardless of whether the car is predominantly used for business or personal use. Certain jobs may have an effect on the premium even if the car is only being used to drive to and from work.
- Provide the correct address of the main place where the car will be kept. Often people put the address of their friend, relative or one of their investment properties located in a more affluent area, in order to get a cheaper premium. Although the suburb may have less car thefts, if it does occur, you could have a tough time explaining why it was being stored in the suburb it was stolen from.
Many claims have been rightfully rejected due to motorists providing false or misleading information, so always make sure you’re honest and the problems should pass you by. If you try and save a bit of money by not disclosing items such as mods, points or speeding fines, it may cost you a lot more in the long run if you’re caught out. It’s just not worth the risk.
Continued at Essential Car Insurance Tips – Part 2