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Confused.com would never encourage anybody to lie on their car insurance application in order to obtain a cheaper quote. But why not? What’s the worst that could happen? Surely a little white lie in order to save a few quid isn’t really hurting anyone? Right?

Actually, it’s pretty important to give accurate information on your application, for a number of reasons. It seems that a number of people in the UK do lie on their application just to reduce premiums. However, in doing so they run a huge risk of invalidating their whole policy. This could prove nightmarishly expensive in the event that they crash into another driver, for example.

And a lie in this instance does not have to be a blatant mistruth.  It could mean withholding a piece of information that the insurer would use in calculating the insurance premium, or misrepresenting the details to get a better price.

If an applicant is identified as having supplied false information, then the insurance company has the right to reject that application – and generally they will not hesitate to do so. Likewise, if the false information is brought to light in the event of the claim, then the insurance company can refuse to make any payment or provide a greatly reduced one. And depending on the severity of the lie, the driver runs the risk of being blacklisted by all major car insurance providers. Such a situation could make it virtually impossible for the driver to obtain car insurance from the mainstream providers, and thus get a cheap premium to drive legally on UK roads.

A victimless crime?

In addition, it is not only the cost to your car that could see you out of pocket. If an insurance company has to make any payment towards a third party, then later discovers you have lied to get cheaper insurance, they could look to recover this money from you.

Uninsured drivers and those with false insurance cost the motor insurance trade millions of pounds annually… a cost which is then passed on to honest motorists in the form of higher premiums! In fact, the Association of British Insurers has claimed that the cost to the honest insured motorist averages £30 per year each.

The most commonly falsified bits of information are a driver’s age, address, and where the car is parked overnight. Other areas where people lie to reduce premiums include motoring offences (including drink-driving convictions), annual mileage and occupation.

Fighting back

Insurers, the police, the DVLA and other bodies in the car insurance industry are increasingly sharing data in order to clamp down on those committing insurance fraud. In addition to such databases, they are increasingly applying data-mining tools to identify anomalies common to fraudulent information supplied in obtaining insurance. The hope is that the use of more sophisticated technology in identifying such trends will ultimately lead to less of an impact on the honest motorist.

Another way

Generally, false information is supplied in the application in order to obtain lower premiums. However, Confused.com believe that this is unnecessary. After all, there are several perfectly legal ways of reducing premiums. Follow this link to find out what they are.

Like for like - the difficulty in comparing car insurance quotes

If you are a young driver or drive a sport car, insurance prices can vary widely. 

But while most of us accept that young driver car insurance costs more, many of us aren't sure why young people pay more (or less) when they move from one part of the country to another.

For example, someone going to a university in a big city will pay far more as a student for car insurance than a young driver would for car insurance in a rural area.

Another mystery is why some companies will drive up your premium if you get points for speeding while others won't.

The reason for this is that technology has revolutionised insurance by enabling insurance brokers to offer a far wider choice of products to cater to different markets.

Challenging insurance myths

Until recently, most insurers hired an underwriter to set their rates. These were people with huge experience in the insurance industry. They decided who was a good risk and who was not. 

For example, underwriters reasoned that people living in London had to contend with greater volumes of traffic so the likelihood of an accident was that much greater. That is why car insurance still tends to be higher for Londoners.

But there were also myths that were widely accepted as fact and used as pricing criteria. For example, journalists were perceived to do a lot of drinking at lunchtime and were viewed as a worse risk than office workers. Similarly it was commonly held that as people turn 25, they magically become better drivers.

Modern insurance methods

These days, underwriters have access to an array of statistics which they use to build profiles of all the claims their companies deal with. This gives them more flexibility to tweak prices so companies can appeal to certain individuals, such as a young drivers. 

Car insurance firms also look at the length of time drivers have held their licence, what area of the country they live in, the size of the car's engine, any No Claims Bonus (NCB) and any claims history when they decide on a price. 

But not all insurance companies cater to every group. Most have portfolios of risks they prefer to cover so they may lower their prices to attract a certain type of customer. Some cater only to standard risks, which includes people who are statistically less likely to make a claim, others prefer offering policies to higher-risk groups, such as offering sport car insurance or classic car insurance, for example. 

If you are not lucky enough to be classed as a 'standard risk', for example, if you are a student, car insurance prices can vary widely, from a slightly higher premium to a ridiculously high surcharge.

The advantage of specialist brokers

In more extreme cases, a specialist broker might be the only way of getting insurance at all.

By covering large numbers of people in specific high-risk categories, specialist insurance brokers are able to offer lower rates of insurance than mainstream brokers.

Take classic car insurance, for instance. Previously, insurers reasoned that since classic cars were older than modern cars, they were less safe to drive and more expensive to repair and so charged their owners higher premiums.

But some insurance brokers realised classic car owners tended to only drive their cars in good conditions at weekends and took better car of them as a whole. They saw them as a viable risk and so specialist classic car insurance was born.

Other examples of specialist brokers include:

• Convicted driver insurance
• Performance car insurance
• Sport car insurance
• Student car insurance
• Young driver car insurance

Comparing Car Insurance Quotes 

Like for like - the difficulty in comparing car insurance quotes

If you want to save money, it pays to shop around, but if you're looking for car insurance quotes, be prepared to go through the same information again and again on the phone or online with various insurance web sites.

It is also important to know the criteria for underwriting varies enormously among car insurance providers and although one company may give you a car insurance quote at one price from the details given, another could use a slightly different set of details to give a different rate altogether.

In short, when you're comparing the prices of car insurance quotes, you won't always be comparing like for like. 

Car insurance quotes by phone 

Telephone sales operators are trained to help you with car insurance quotes and can lead the driver in a way which will help them get the best price for the details submitted. 

The disadvantage is you have to go though a number of lengthy phone calls to various car insurance providers before you can start comparing quotes.

Online car insurance quotes

Comparing prices over the internet can be equally bewildering if you go to each car insurance site individually. Most insurers' websites only give car insurance quotes for standard risks and have little flexibility.

Filling in exactly the same details and interpreting the wording is not easy and even small variations in the details can make a big difference to the resulting quote. This makes it even more tricky when making comparisons.

It is worth researching car insurance quotes on the internet through a site such as Confused.com because you fill in one form and we do the legwork for you.

Having car insurance is an absolute must for all motorists on UK roads. But why is this the case? Well, the short answer is that it is a legal requirement to have at least third party cover. Then why is it a legal requirement? That’s where the long answer comes in.

First and foremost, UK road users need to have a basic level of insurance to indemnify third parties. This has been law since 1930, and was updated in the Road Traffic Act 1988. The law provides that you must have some kind of insurance or protection against their liability to third parties (which could mean other road users or pedestrians) in the event that personal injury is inflicted upon them, or that their property is damaged, as a result of your use of the road. In simple terms, other people deserve to be protected against any fallout that may result from your use of a vehicle. Being insured will protect unwitting parties therefore against costs incurred due to injury, damage to their vehicle, and legal costs.

Consider the position where you accidentally drive into another car, but have no insurance. You may not be able to afford to cover damage to the other driver’s car, or medical bills incurred due to injury inflicted. Any resultant legal costs may also be substantial. But surely it’s not fair that the driver who isn’t at fault foots the bill?

One may be given to think ‘Well, I’m a good driver with a perfect track record – I’m not going to cause an accident’. This may very well be the case – however, the only way to guarantee such a clean-sheet is to never get behind the wheel. There are countless ways in which an accident may be caused where you may not consider yourself to be at fault in normal terms, yet would be at fault in legal terms, as the cause of the incident is not an insured party. Examples of this could include collision resulting from skidding on black ice, or swerving to avoid an animal that has strayed into the road.

So it becomes apparent that car insurance is not a matter of preference, but of legal necessity – and in most cases economic necessity too.

Ok, so why might one need a level of cover over and above the minimum legal requirement? Well, a greater number of drivers will have third party, fire & theft (TPFT) than third party only, as this will indemnify the vehicle user in the event that their pride and joy is stolen or burnt to a crisp. The desire to protect oneself against such eventualities is fairly commonsensical. Although there have been advances in anti-theft technology such as immobilisers and alarms, one can never fully alleviate the risk of a car being stolen or damaged in an attempted theft.

Furthermore, upgrading to comprehensive cover will protect you against most eventualities that this capricious world may choose to throw at you. The key difference between this cover and less expansive levels of car insurance is that you will be indemnified for damage to your own vehicle, even if the incident is deemed to be your fault. Although you do not ‘need’ this level of cover in the sense of a legal requirement, it is usually prudent if – for example – you could not afford to replace your car in the event that it was written off.

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