Insurance myths could prove costly
There are so many rules and regulations to driving that it is unsurprising so many drivers are confused as to what they can and can't do on the road. Sarah Routledge tries to see the confusion and head down the road to safer driving.
Although (hopefully) most of us are aware of driving laws, there are many insurance myths that prevail, which could prove costly in the event of a claim.
A poll from Swiftcover.com found almost a third of drivers (29 per cent) believe they are insured to drive another person's car - but this is not necessarily the case.
Small print in some policies may say you will only be covered in the case of an emergency - or in some cases, not at all. And driving without insurance may mean you end up in court in the event of an accident.
Even if you are covered for driving another car, the policy will rarely extend beyond third-party cover.
In the same poll, 20 per cent of drivers admitted they are not sure if they would be covered if they were involved in an accident while smoking, eating or drinking. Although none of these activities are illegal in themselves, they could be considered negligent and therefore invalidate your policy.
And ten per cent of drivers assumed that the cost of ruining their engine by accidentally filling it with the wrong type of fuel would be covered - but if you use petrol instead of diesel, your insurer probably won't pay out, according to swiftcover.
Tina Shortle of swiftcover says: "While choosing the lowest price car insurance policy is most people's objective, it is also important to know exactly what is and isn't covered.
"Drivers make a lot of assumptions about their policies, so it's best to read all terms and conditions carefully and to regularly review the terms."
Although most people are aware that lying to their insurer will invalidate their policy, fewer realise that omitting important details can also lead to a claim being denied.
For example, failing to tell your insurer you have moved address, or that you now travel further, will affect your policy. But according to swiftcover's poll, a quarter (25.8 per cent) of motorists didn't know whether driving over their stated mileage would affect their insurance cover - while nearly a fifth (16.1 per cent) stated that it wouldn't.
And another survey from Tesco motor insurance showed 13 million motorists mistakenly believe they do not have to tell their motor insurer if you have fewer than six points on their licence.
Many do not report speeding fines, or minor incidents, for fear that they will increase their premiums - but this is not always the case, according to Tescocompare.com.
A spokesperson explains: "If you have a minor accident - like if you backed into a lamp post and dented the bumper - then you wouldn't have to tell your insurer. But if you make a claim, and you switch insurer, you will need to tell them."
However, you do need to be honest about anything that could materially affect your policy - including any speeding fines.
"If you don't and you have to make a claim, they probably won't pay," the Tescocompare spokesperson adds.
"But if it is your first offence, your premium probably won't go up that much. If you have six to nine points on your licence, you can expect a substantial increase. But for three points, it won't be too bad - some won't put it up at all!"
It is also important to tell your insurer of any changes to your circumstances, Erik Nelson from Norwich Union says.
"The important thing is if your circumstances change, you need to let your insurer know. If you move house, and your new house has a garage, actually you could get some money back.
"So a change doesn't necessarily mean an increase in your premium - in most cases, there is not. But we do need to know."
Mr Nelson said if you have any questions about what your insurance covers, you can always ask your insurer.
"Checking all your terms and conditions can seem like hard work, but a claim can cost thousands so you are getting value for money."
Norwich Union suggests thinking about what you really need out of your cover - will you want to drive another person's car, or do you want someone else to drive yours, for example - before taking out the policy.
"If you were going to spend £400 on a stereo, you would do some research into exactly what you want - if you use the same process on insurance, then you will know you are covered," Mr Nelson added.
One of the reasons so many are confused about their cover could be related to the way insurance policies are sold, the British Insurance Broker's Association (BIBA) says.
An emphasis on price in a highly competitive market may be leading some consumers to concentrate too much on getting the cheapest deal, rather than thinking about what cover they are actually getting.
Insurance comparison websites often make assumptions on behalf of a customer - which may not be true - when calculating a quote, meaning many could be paying for a product that is not adequate for their needs.
The Financial Services Authority (FSA) is looking into this problem, however, and recently published a report.
Graeme Trudgill from BIBA says: "One of the key points the FSA made in its report is it is not just the price that is important but what is covered."
He added: "You have to look at the bigger picture. We did a lot of research and found that a third of people did not realise that assumptions are being made on their behalf.
"For example, when calculating a quote, a comparison website might assume you have a standard job, but if you have a higher-risk job it will be more expensive.
"We prefer websites that do not make assumptions - like gocompare.com."
Mr Trudgill also pointed out that the cheapest deal is not always the best value deal, as a high voluntary excess may push down the price of the premium, but make claiming a very expensive business.
So when choosing your cover, be aware of what assumptions are being made and make sure your insurer has the right details from the start.
Sarah Routledge
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