A simples guide

The need to declare all vehicle accidents when making an application

It’s fairly well understood that when you apply for car insurance, you’re expected to disclose details of all previous car accidents you have been involved in as a driver.
However, it’s less well known that you also need to disclose details of all vehicle accidents. So if you’re applying for car insurance and you’ve been involved in accidents whilst riding a motorcycle, for example, the insurance provider will expect to be told about those incidents. The reverse also applies, so car accidents should be disclosed when applying for insurance to drive other types of vehicle.

Some people also believe that accidents that occurred when they were driving company cars do not need to be disclosed when applying for personal car insurance. Once again they’re mistaken and the insurance provider does expect to be told about these.

These accidents must be disclosed even if you didn’t make an insurance claim at the time, or if you were not at fault in any way.

Back in 2009 the Automobile Association reported a 30% increase in a period of just six months of insurance providers refusing claims because policyholders had given false, incomplete or misleading details at application stage. This statistic related not just to failing to disclose previous claims, but also to undisclosed convictions, not being clear about who the main driver of the car is and not informing the insurance provider of modifications to the vehicle.

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Previous ‘no-fault’ accidents

We will ask you to provide us with the information on any claims from the last 5 years, regardless of whose fault it was. Unfortunately insurance providers generally feel that if you’ve been involved in one accident, then it is more likely you will have another, even if you were deemed not to be at fault. They may use as a justification that the accident most likely happened on a road that you use regularly, and that it may therefore be a dangerous road in general.

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How insurance providers will identify non-disclosure

Insurance providers carry out cross-reference checks between different vehicle insurance databases, and so it’s highly likely that any non-disclosure will be identified. The likely consequence of failing to disclose other vehicle accidents is having your policy invalidated.

Legislation

The Consumer Insurance Act 2013 now gives added protection to the consumer on this issue. Insurance providers now have a legal duty to ask all relevant questions at application stage. It is now written in law that claims cannot be declined for non-disclosure unless you deliberately or recklessly withheld information.

No claims bonuses

No claims bonuses usually only transferable between cars and vans but this does differ by provider. So it’s probably best to expect that you won’t be able to use your car’s no claims bonus when applying for motorcycle insurance, or vice versa.

The Financial Ombudsman Service

If your insurance provider acts unreasonably in declining a claim on the grounds of non-disclosure, your first step should be to make a formal complaint to the company. They may well not wish to admit an error, and decline your complaint, however any complaint about a rejected insurance claim can be referred to the independent Financial Ombudsman Service (FOS).

Referrals to the FOS must be made within six months of the date the insurance provider sends you its final decision letter regarding the complaint.

The FOS was set up by Government and will carefully consider whether the company was right to reject your complaint. Its services are free for consumers to use and any decisions it makes are legally binding to the company. So for example if the FOS finds in your favour regarding a vehicle insurance claim, it will instruct the insurance provider to pay your claim, and may also award you an extra payment for interest on the value of the claim.
The FOS is unlikely to uphold your complaint if it feels that you engaged in deliberate non-disclosure, or reckless non-disclosure where it’s extremely unlikely that you overlooked the relevant information.

However, your chances at the FOS are greater if your non-disclosure was ‘innocent’ or ‘inadvertent’. This may for example include minor incidents that occurred some years ago that slipped your mind, or instances where your response was incorrect due to the confusing wording of the question on the application form.

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