Have you checked your motor insurance policy recently?

HAVE YOU CHECKED YOUR MOTOR POLICY RECENTLY?

(I bet you haven’t)

 

It is only when people want to make a claim that it suddenly dawns on them that they don’t have the cover that they thought they had. But they might also realise that while the level of cover is correct what that policy includes is not what they thought.

First and simplest: check your documents and make sure they are correct. If they aren’t ring your insurer to get them put right. Your insurer will assume they are right if you don’t tell them they are not and if you have to make a claim and omissions and errors come to light the claim cannot proceed until these are rectified. So check to see that you name and address are correct, that the car details are correct and that your policy allows you to drive the car for the purposes you need it. These are the basics but check the following too:

 

Who is the registered owner and keeper of the vehicle?

The name on the registration document (V5) is the owner and keeper of the car and the insurance policy must therefore be in their name. In other words: if it’s your name on the V5 then the insurance policy must be in your name also. Even if the car was bought for you; if it’s your name on the V5 then it must be your name on the certificate of insurance (and that’s still true even if you never drive the car yourself).

 

Who is allowed to drive the car?

You will be asked who the drivers will be on your policy.

Insured Only to Drive (IOD) - only the policyholder may drive.

Insured & Spouse/Partner - Insured & wife (or partner)

Named Driver Policy - The Policyholder and another driver: This could be you and a sibling or a friend or an employee.

Any Driver policy - Usually this will be for a vehicle belonging to a business where any employee is allowed to drive it.

You can still be the policyholder even if you don’t drive the car and your policy will simply note that you are ‘excluded’ from driving with someone else declared as the main driver.

 

Who will be the main user of the vehicle?

Your insurance premium will (among other factors) be rated on who the main user is and which of the drivers on your policy is the highest risk. A businessman who does a lot of travelling for his work will be a higher risk than his wife who only uses the car for shopping and visiting friends occasionally and a young driver will be higher risk than his 45 year old dad. In a case where a father is the policyholder and has his 18 year old son on the policy as a named driver the premium will be based on his son because he is the higher risk. Which brings us neatly to…

 Fronted Risk.

Some people buying insurance know this. They know that if they by a car for their 18 year old son the insurance policy will literally cost thousands. So they:

a) say the car is theirs, when it’s not and

b) declare themselves to be the main user when they aren’t.

This is what insurance companies call “a Fronted Policy,” a blatant attempt at deception to reduce the cost of buying an insurance policy. An insurance company will immediately become suspicious in cases where the drivers on a policy are a father and a young sibling and the father says the car is his and that he is the main user. Suspicions may also be aroused if the car is question is not the sort of car one would expect a middle-aged person to drive. Or if it is a 2^nd family car. Or if the car is insured by a woman who is a housewife but she has her 18 year old son on the policy as a named driver.

So before dealing with any claim your insurer may want to see proof of who bought the car and check who is named on the registration documents as the 'owner and keeper'. If your insurer decides that it is dealing with a 'Fronted Risk'  It will then demand a hefty additional premium to be paid (charging you what should have paid in the first place) and will not offer to renew your policy. In which case when you attempt to get insurance elsewhere in the future and you are asked if you have ever been refused cover you will have to say ‘yes’ and give the reason why.

 

Have you had any accidents or claims in the last three years?

Many people will say ‘no’ to this question assuming that the question is really asking, ‘have you had any accidents or claims in the last three years‘…

a) while insured with our company, or

b) while driving this car, or

c) for which you were at fault.

But the question is not asking that at all. It’s asking if you have had any accidents or claims in the last three years. Your claims history is a material fact that an insurer needs in order to calculate the risk and work out the appropriate premium for it.

Have you had any convictions on your licence in the last five years?

All too often people don’t mention convictions they have on their licence until it comes to making a claim. The consequences could be that your insurer will recalculate the premium taking this new information into account and will ask you to pay an additional premium before the claim can proceed which can be very expensive if the conviction happened more than one year ago and is backdated. Or it may decide to refuse to renew the policy and in extreme cases may even repudiate the claim and cancel the policy. Some convictions carry more severe penalties than others. A CU80 for instance is treated more harshly than a SP30 while some insurers will not offer cover for anyone who has been convicted for drink driving. The most common convictions that people have on their licence are:

Speeding (SP30/40/50)

Ignoring traffic lights (TS10)

Using a mobile phone (CU80)

Driving without insurance (IN10)

Drink driving (DR10).

Again, beware of the question. It is not asking you if you have any convictions currently on your licence. It’s asking you if you’ve had any driving convictions in the last five years. Saying ‘no’ to this question because your SP30 from four years ago is off your licence by now is the wrong answer.

Let’s suppose your policy runs from 01/01/10 to 01/01/11. Any conviction that occurred between those two dates will not affect your policy until the policy is due for renewal in 2011.But any driving conviction that occurred before 01/01/10 will be charged for and the charges will be backdated. In other words if you had a speeding conviction three years ago but didn’t tell your insurance company until now your insurance company will charge an additional premium for each of those three years.

 

Has your vehicle any non standard modifications?

This is another area where people make mistakes. You must check and be sure that your car has no modifications on it (especially if you are buying a second hand car from a private seller). A non-standard modification is anything added to the vehicle that is not ’factory standard’. It is anything that changes the look and/or performance of the car. So tinted windows are a modification, alloys, a lowered suspension, a box exhaust, body kits and any alterations made to the engine are all examples of modifications that need to be declared. If you buy a car from a dealer and he offers you ‘options’ that you can add to your car then these will also be modifications that your insurance company will need to be told about. (There are exceptions to this: some insurers will allow you to have modifications on your car if the value of those modifications are less £1000. Also modifications to the interior of the car, things like leather seats, will not adversely affect your premium).

 

Many insurance companies will not insure a car that has modifications on it if the policyholder is a young driver . And if they find out such a policy will be cancelled at inception. If you are challenged by your insurance company and you tell them, “well I didn’t realise that it was a modification” wont do you any good. It is your car and it’s your job to know what kind of car it is and whether it has any modifications on it. Nor will it help you to say, “I know it has tinted windows but that’s not a modification.” It’s not you who decides what is a modification. It is not you who decides what an insurer needs to know. Neither will it help you to say, “but they were already on the car when I bought it.” Again, if you have alloys for a Polo on a Golf then that is classed as ‘non-standard’ modification because although both cars are made by VW they are different models. If an insurer finds out that a car does have undisclosed modifications on it then just as with driving convictions the premium that you paid for your policy will have to be recalculated to take this into account and an additional premium will have to be paid. You will be asked to provide proof of when the modification was bought and the premium recalculated from that point. If you are not able to supply proof of fitment then the additional premium will be charged from when you took out the policy.

Backdating additional premiums.

If your insurer is made aware of undisclosed driving convictions or claims or modifications on the car going back one year or more they will recalculate what the premiums would have been had they been made aware of these facts at the time. However a FOS ruling has decreed that additional premiums cannot be back dated as the policies these are being applied to are contracts that have ended. Even so an insurance still continue to ‘backdate’ additional premiums.

 

In conclusion.

Check your policy documents . If any discrepancy occurs that affects your cover or your ability to claim it wont be sufficient to say, “but I told you that when I rang.“ Your Insurer can usually check what was said at the time as all calls are recorded. But even if they can’t they will refer you back to the documents that you were issued and will ask if you checked them and if you did and could see that they were inaccurate why you didn’t ring back to get the errors rectified.

Answer all the questions that are put to you. Don’t be tempted not to answer a question merely because it doesn’t seem relevant to you or because you think its none of their business. You want to buy a motor policy and an insurance company wants to sell you one. But the contact you agree to will always have be on their terms and conditions. When you ring up for a quote an insurance company will ask all the questions it needs to in order to establish whether or not it wants your business (it may decide that it doesn’t) and if it does how much it will charge for it (again a high premium is a sign that it doesn’t really want your business).