A mum was left fuming after her son had his car insurance cancelled and was told the cancelled policy could stay on his record indefinitely
Making one critical error – particularly while young – can permanently damage your record and cause insurance premiums to remain elevated for life, with ‘no time limit’ according to an expert. The problem centres on having a policy cancelled by an insurer.
Sky Money reported that a mum had contacted them after her son encountered difficulties shortly after passing his driving test. She said: “When my son passed his driving test several years ago, he fitted a black box to his car to reduce his premium. Being young and silly, he exceeded the speed limit, which the box obviously detected. He was immediately informed his insurance was cancelled and he had to find an alternative company.
“The problem is this offence never goes away. When he looks to take out any form of insurance, he gets asked the question “have you ever had insurance cancelled, declined or refused?”. He answers yes, and the choice of companies is narrowed, and the price is always a lot higher than if he had said no. The comparison websites never allow you to explain what exactly happened. I too was recently asked “has anyone in your household ever been refused insurance”. I accept he should have been punished for his misdemeanour, but surely not for the rest of his life (or mine).
“Do you think after a set amount of time he could deny it was cancelled?” She was informed by an expert at consumer group Which? that insurers will verify whether an individual has had a policy cancelled, and anyone should always declare it when questioned. Dean Sobers, car insurance expert at Which? said: “If you untruthfully answer a question – or agree with an inaccurate assumption – when applying for insurance, you risk invalidating the policy.
“This means that if an insurer asks if you or someone living with you has ‘ever’ had a policy cancelled by an insurer, you need to say if this happened – even if it was 20 years ago.
“The yes/no format of the question – without allowing room for context – is one of the more unfair quirks of insurance. You can usually stop declaring the motor offence itself after about five years – but the consequent policy cancellation often needs to be admitted to indefinitely.”
Specialists noted that the majority of comparison websites and insurers enquire about cancelled policies when someone attempts to obtain a quote or arrange cover. They added that while some insurers ask about a specific timeframe, such as the past five years, others ask whether it has ever occurred, making it crucial to read each question thoroughly.
Kara Gammell, car insurance expert at MoneySuperMarket, said: “It’s worth noting that some insurers only ask about your history over a set period, so in certain situations it may not always need to be disclosed – but this depends entirely on how the question is worded, so it’s important to answer exactly what’s being asked.
“Unfortunately, a cancelled policy doesn’t simply ‘fall off’ your record. In many cases, it can remain there permanently, making it harder and often more expensive to find cover in the future, which is why your son may be seeing fewer insurers willing to quote or higher premiums.”
Mr Sobers added: “There aren’t general rules dictating a time period after which a past issue becomes irrelevant. Insurers take different stances.”
Experts warned that, above all else, people should never be dishonest about their circumstances. In the most serious of cases, individuals could face fines, prosecution or even a criminal record if found guilty of fraud.
Should this occur, Sky Money reported that the individual would have their name added to the Insurance Fraud Register — an industry-wide database used by insurers to make underwriting decisions and assess claims.
At present, 21,241 people are listed on the register. Appearing on it could have far-reaching consequences for all future insurance applications, not just those relating to motor cover, and may also have a detrimental impact on a person’s credit rating.
