I’m constantly surprised at the number of otherwise scrupulously honest people I overhear suggesting to their friends or colleagues that they should distort the truth (to put it charitably) in order to get cheaper insurance cover.
It seems a lot of people think it is ok to tell insurers that the main user of a car is someone older than the owner, or is female if that would suggest a lower cost. Or perhaps to say the car is kept at a different address or that a house is never used for any business purposes. Of course, European law may mean ladies will be soon be charged the same as men but the principle of distortion of the truth remains the same. Many years ago, it was routine for parents to insure an extra, often older, car with their teenage son or daughter as a named driver, thus avoiding hundreds and perhaps thousands of pounds in premiums. That was always a “dodgy” tactic but decades ago, trying to take advantage of insurers was not prosecuted, albeit you didn’t get a full payout if you were caught.
This was always against the law but over the years, such tactics, along with blatant false or exaggerated claims have come to be accepted as fraud and are prosecuted as such. The same is true of any financial wrongdoing – there is a story in the news today about someone who falsified earnings to obtain mortgages and secure financial advantage. In these circumstances, even the mortgage adviser or broker involved can find themselves in hot water.
So, hence my surprise. Honest people wouldn’t go to the supermarket and swap price labels over to get goods cheaply, so why would they represent the facts differently in order to get a lower rated risk and pay less in premium? Yet, I often hear it suggested and I’m sure you do too.
Quite apart from the fact this is actually fraudulent, misrepresenting the facts means that when a claim occurs, the policyholder is almost certain to be caught out and this will result in no adequate protection being in force, perhaps leaving them without a home or a car and maybe with an expensive third party liablity to reimburse as well.
Honesty is always the best policy. If you really can’t afford it, then don’t apply for it or find a legitimate way to make it cost less. That’s one of the things that mortgage and insurance brokers are here to help you with but we can only do it if our customers are honest with us.