13 November 2012

A new look for your car, a higher quote from your insurer

Did you know that even fitting alloy wheels could affect your policy?  Here are five possible pitfalls (from an article in the Telegraph this week).

For most motorists, buying can insurance seems pretty straightforward.  However, few of us realise that there are common pitfalls that could mean you end up paying more for your insurance - or invalidate your policy altogether.  Read on to avoid being caught out.

1   Becoming unemployed: When you lose your job, the last thing on your mind is the cost of your car insurance increasing.  Yet motorists who register themselves as unemployed can face an increase in premiums of nearly £800, according to a leading comparison website, as they are seen as a high risk to insure. 
In the eyes  of an insurer, a downturn in financial circumstances, such as losing your job, means you are more likely to make a claim, which drives up premiums (what rot!).
Apparently those who are unemployed appear to get hit from both sides, expecially if they need to drive to find work and attend job interviews, yet insurers tend to charge a lot more for this type of driver, at a time when they may be least able to afford it.

2  Bad Credit History:  To most motorists it will come as a surprise that missing or late payments on debts, such as loans and credit cards, can push up the cost of your car insurance.
Insurers may look at an aplplicant's credit history when determining the cost of their policy, and drivers who don't have a near-perfect record may see the insurer raise the premium or even decline to cover.
However, a spokesman for a leading breakdown service poins out that these checks were often carried out on customers who opted to pay by monthly instalments, as this involved a credit agreement.  Apparently concern about ability to pay would result in them being asked to pay up front and in such circumstances it might affect the premium. 
The reasoning and acturial evidence is that the insured's car might be badly maintained and so on, which would increase the risk of a collision (what rot!!).

3  Doing charity work: If you volunteer your time for a good cause, you could find yourself out of pocket when it comes to insurance.
Charity volunteers who are retired could end up paying £20 or more for their annual car insurance or find that later claims are rejcted because their regular voluntary commitments are classed as business use.
Insurance experts say that customers should be careful to declare regular charitable work, even if it was unpaid, or face any claims being rejected if they were in an accident on the way to a voluntary placement.

4 Failing to disclose spent convictions or claims: Remember that speeding fine and three points you picked up three years ago?  It may be a distant memory, and one you are not too fond of, but you must tell your insurer about any convictions you have incurred over the past five years, including the type of offence, the amount of the fine, the number of points you were given and the length of any ban.
When the ponts come off your licence it does not mean the conviction is spent, so you must declare it on your application.  
This is the biggest challenge for an insurer, whether it's intentional or not and any non disclosure may inpact on a future claim.  This is because the premium calculated would then have been based on inaccurate information.

5 Making modifications:  Drivers who do not inform their insurer of any modifications that have been made to their vehicle can invalidate their policy.
Fitting alloy wheels or rear spoilers is considered a 'modification' by insurers and, if they are not declared when applying for cover, a claim can be rejected.
Making these alterations can increase insurance premiums because they make the car more desirable to thieves or enhance its performance.  Some modifications are even illegal, for instance many people don't know that the law requires the front windscreen to allow at least 75% of light through, with a minimum of 70% for the front side windows.

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