The Cleanest Car in the World?

Imagine the scenario - while you're out at the office, you've asked the other half to fill up the car at the petrol station and, hey, while she's there, why not give the car a jetwash?

Something not dissimilar must have transpired here, as filmed by the incredulous occupants of the car behind...

Wonder what her fella said when she got home!

I checked with our claims manager, and he reckons it's rather unlikely that an insurance company would pay out for any damage caused by this kind of idiocy, so please don't be tempted to try it yourself.

How not to do Insurance Fraud

Mark Davis of Schenectady, New York, has provided what is, quite possibly, the dumbest insurance fraud perpetrated in recent years. He rang his insurer to report a broken rear windscreen on his Mitsubishi Eclipse. Problem was it wasn't broken, so when the loss adjuster turned up, he found it intact and rejected the claim.

Clearly this wasn't the result Davis had been hoping for, so he called back the insurance company and asked them to check it again. The adjuster dutifully returned to the car to find that it was indeed broken. Unfortunately for our would-be fraudster, he also found a bunch of witnesses who had seen Mr Davis smashing the window in himself.

So instead of receiving his claimed $3,300 payout, the witless crook can instead instead look forwards to getting up to seven years behind bars.

News reports are here, here, here and here.

Young Driver Insurance - To Front or not to Front?

I've mentioned fronting in a previous post outlining the perils of lying to your insurance company, but right now fronting - the term for when a young driver insures their car in the name of an older relative (usually mum or dad) - has been in the news of late.

The news is that many insurance companies are getting tough with fronted policies. In fact, several high profile insurance companies have recently stopped accepting fronted risks. And on Saturday a Moneybox programme on Radio 4 (you can currently listen to it here) covered the issue, and has prompted a heated online debate on fronting.

The most worrying thing from a young driver's point of view was the mixed messages coming from companies like esure. Despite the fact that esure currently allow the purchase of a fronted policy, their spokesman said:

"Any act of deception to try to get a lower insurance premium with your insurance company is tantamount to fraud."

If I were an esure customer insured in my mum's name, I would be very concerned about a statement like that. It suggests that if you were to make a claim, you could be in serious trouble. And as if to underline that the whole industry is clamping down on the practice, the head of the Association of British Insurers (ABI), Nick Starling has recently commented:

"Insurance cheats are more likely to be caught than ever before. And cheats will pay a high price as future insurance and credit will be more expensive and harder to obtain."

And don't bother running to the insurance ombudsman either if you're refused a claim over fronting. Says Peter Hinchcliffe, lead insurance ombudsman:

"If you are the parent and you have said you are the main driver and the car has been in an accident, or stolen, at your son or daughter's university, you have got a lot of work to do to explain how that has come about."

So what's the solution?

At Adrian Flux the problem of fraudulent fronting is simply not an issue for our customers. We do not accept any risks that are, or appear to be, fronted. We always rate our insurance quotes based on the highest risk driver, which, the statistics show, is usually the youngest.

If all insurance companies took this line there wouldn't be a problem.

If there were no fronting, there would be benefits for everyone. All middle aged drivers would get lower premiums, because their statistics wouldn't include so many claims by their children.

And believe it or not younger drivers might wind up with a cheaper premium too. No, really. Being insured on your parents policy is all well and good, but the problem with this is that you do not accrue any no claims discount of your own (see note)*. Since no claims discounts are pretty hefty for younger drivers, you could well end up paying less over a period of a few years simply by getting your own policy.

But if all this hasn't been enough to convince you that fronting is a bad idea, then please read this informative post on fronting from the Max Power forum.

Here are some tips for cheaper young drivers insurance:

• Do Pass Plus, IAM or Max Driver - that will save you up to 40%.
  
• Think about insurance when you buy your car - one of our top 10 cheapest cars for young drivers might be for you.
  
• When you get a quote always answer all questions truthfully, otherwise you might be in hot water.
  
• Before you do any modifications, check to see what impact they will have on your premium. Believe it or not, some mods can reduce your premium, and we can offer modified car insurance to young drivers, but be aware if you're planning to fit turbos and a nitrous kit to your Corsa, your quote may well be beyond your budget.
  

*Direct Line do of course advertise named driver No Claims Discount, but in practice this may not be transferable to other insurers, so you could find yourself stuck with Direct Line when you decide to take out your own policy. You might be happy with this but bear in mind that many people think that the real reason that Direct Line hate comparison sites is that Direct Line's prices are simply very expensive when compared with other quotes!

Policy Add-ons - Useful or useless?

This is part four of my analysis of the Direct Line / Confused.com war of words.

Another prong of Direct Line's assault on the aggregator websites was a claim that there was no information on policy features and add-ons provided by the price comparison sites, and that often the prices are cheap because the policy is very basic.

On the face of it, this seems like a reasonable point, but some of the aggregators do allow you to compare other features of the policy and there are other reasons that we shouldn't accept this argument on face value.

Lets take a look at some of the "great" policy features that Direct Line brag about to their potential customers:

• Named drivers earn their own no-claims discount: This, along with the advert used to illustrate it, seems to me to be a tacit admission that many of Direct Line's policies are what are called fronted risks. This is insurance jargon for insuring your car in the name of your parents, or another elder relative, and most insurers consider this a form of fraud and some will decline to pay out if they establish that a named driver is actually the main user of a vehicle if this has not been clearly stated at the time the policy was taken out. Adrian Flux will usually decline to offer a quote on anything that looks like this situation, but that's not to say you can't get a discount for driving experience you have built up while covered on someone else's policy - if this is your situation, ring us on 08000 838833.
• Match your no claims bonus on a second car plus 10% discount for second cars: As specialist insurers with lots of classic cars, kit cars, cherished cars and show cars on our books, many of the cars we cover are second cars, or even third, fourth or 38th cars. As a result we've been offering matched No Claims Discounts for years, and that applies to standard cars as well. In fact if you have more than a couple of cars we can offer multi car insurance or a family fleet policy. And our discounts for second third and fourth cars can rack up to substantially more than 10%, because we know that you can't drive everything at once.
• Keep your no claims when you are hit by an uninsured driver: Sounds great doesn't it, but there are a few catches here. First off you need to give Direct Line the registration number of the offending vehicle. No good at all for those numpties who hit your parked car while you're shopping nor if the criminals (which is what uninsured drivers are, after all) speed off without giving you a chance to eyeball their plates. They'd also like you to collect the uninsured driver's details "if possible". You could just get a protected no claims policy which would protect your no claims discount, whatever the cause of your claim. Most companies now offer this feature for a small additional premium.

That of course is the point. All of these features come at a cost, and the customer has to pay for these features.

With a specialist car insurance broker, like Adrian Flux, you can ask for policy features that match your needs and we will do our very best to find a company with a policy that offers what you need. You may pay a little extra for the additional benefit, but most people would agree that that's only fair.

But if you're with Direct Line, you are paying for the provision of those named driver benefits and uninsured claim NCB protection whether you want them or not - through a higher premium. And what's more, you may find yourself with a restricted choice at renewal time, as virtually no other insurer will decide to accept their named driver no-claims discount (that is the case at the time of writing anyway)

As I said earlier in the post, we would be able to offer an introductory discount for driving experience as a named driver, but younger drivers may well, in years to come wish that they had just got insurance in their own name with their own NCD.

And while we're on the subject of policy features, most customers these days have grown used to the fact that most comprehensive policies now include a courtesy car while yours is off the road as a standard feature. Direct Line don't.

Nor do they include free legal cover.

I haven't heard them mention that in their ads, though.

8 Fibs You Tell Your Insurer at Your Peril...

Lying is a major problem for insurance companies. But it could be even more of a problem for the drivers who lie in order to get a cheaper premium. They may well find out that their deception is detected only at the time they need to make a claim.

Some of the most commont pork pies people are tempted to tell their insurance company:

• Business use - not declaring business use for your car. This is especially tempting to part timers and home workers, but if you use your car for business purposes you need to tell us.
  
  
• Withholding motoring convictions - in some cases convictions will add nothing to the premium, in other cases they will add a smaller or larger amount, but Adrian Flux can offer you a good value quote, whatever your history, so don't risk driving around on invalid insurance - you'll only pick up another conviction if you're caught.
  
  
• Withholding criminal convictions - where others can't quote, Adrian Flux can. Again, don't risk invalidating your insurance.
  
  
• Fronting - insuring your car in the name of a parent or older relative. This is probably one of the most common lies told to insurance companies. This is why quotes are always rated on the youngest named driver. Honesty is always the best policy.
  
  
• Undisclosed modifications to the car - Adrian Flux can cover pretty much any modification going, from body styling to nitrous kits. Some mods add nothing and might even reduce the premium. In any case we will cover all your modifications on a like for like basis, so please tell us about them all.
  
  
• Lying about your claims history - If you're not detected when you take out the policy, you will be found out if you have to claim again. Insurers now have very sophisticated software, introduced to combat organised fraud, which analyses claims for patterns - all the insurance companies share the claims data to cut fraud to a minimum.
  
  
• Incorrect licence - some drivers will claim a full UK licence when they actually have a licence from another country. Not a good idea if you want the insurer to pay out in the event of a claim.
  
  
• Giving an alternate address - I heard of one case where a young man who lived and worked in central London had told the insurance company that his main address was in a Swansea suburb, where his parents lived. The massive savings on his car insurance were more than negated when he had to make a claim and investigators found out the truth.

If you are tempted to lie because you feel you may be refused a quote, then come to Adrian Flux. We can find an insurance policy for almost any driver, but you should always tell us the whole truth, or you policy will be worthless when the time comes to claim, even if the thing you lied about is irrelevant to the incident. We will always do our very best to help you, and unlike companies that provide quotes from a computer screen, our underwriters can take all factors into account when calculating your premium. Give us a call on 0800-083-8833.