Confessions of a car insurance salesman

Q: Why is it that if you have insurance cancelled, you have to declare it for evermore? If you go to prison, you don't have to declare it after seven years…

SA: This is because declaration of a criminal conviction is in an area covered by law regarding ‘spent’ convictions. Declaration of insurance cancellation is not. Incidentally, some very serious offences involving prison sentences of more than four years are never considered ‘spent’.

A: The way insurance providers ask if you have ever had a policy cancelled is a bit misleading.

If your policy was cancelled voluntarily, for non-payment on direct debit, because the insurer wouldn't quote after a mid-term adjustment (ie. change of vehicle), then any future insurer generally doesn't need to know.

If you have had a policy cancelled due to non-disclosure (for example, of previous claims or convictions) or fraud – this is what they need to know and essentially what they're asking.

Virtually all reputable insurers will perform some checks in this area on new policies; however, some will be more thorough than others. Claims and Underwriting Exchange (CUE), Motor Insurance Anti-Fraud Theft Register (MIAFTR) and Credit Industry Fraud Avoidance System (CIFAS) are all databases used by insurers for different purposes.

Q: Why does a less powerful, slower, less valuable BMW that is standard and not at all attention-seeking cost more to insure than my VW adapted race car, which is more powerful and faster?

A: Pretty much everything an insurer asks you (aside from name and phone number) is a rating factor. Claim stats may show that, across the board, the VW presents less risk (ie. chance of a claim and cost of that claim) than the BMW. One example: the insurer may view your VW as a more favourable risk as it is clearly enthusiast-owned, therefore chances of a claim may be lower.

Q: I move around a lot. I insure my car at my parents' address (one-two nights a week), I work away Monday-Friday and stay in hotels for the four weeknights. When not working or visiting parents, I stay with my girlfriend in a house in which I share the rent. Am I doing something wrong by keeping the insurance registered to my parents' address?

A: From an insurance provider's perspective, you have a main address (correspondence address), which would generally be your main residence, and a risk address, which is where the car is kept overnight.

As you can't have multiple risk addresses, pick one place the car is kept at most of the time. As it sounds like this is a pretty even split between your parents' and your girlfriend’s, it doesn't sound like you're doing anything wrong.

As and when your situation changes and there is a clear single place where the car is usually kept overnight, it would be advisable to inform your insurer or at least pose them your above question.

Q: My BMW M135i was recently stolen and I'm going through the claims process with insurer A. The process is not complete but they have accepted my claim, although not agreed on a payout etc. My Vauxhall VX200 insurance is due for renewal soon with insurer B. Since I haven't technically completed the claims process with insurer A, when I do my renewal do I have to declare the fact that I am going through the claims process?

A: You'll need to declare the theft claim to insurer B.

Q: My son has been quoted £1700 on a 2002 Peugeot 206 1.4 versus £1050 on a newer, higher-value 2006 206 1.4. Any logic to this?

A: Newer cars have better safety features and passengers are less likely to be badly injured in an accident. It may be that the newer one has airbags, anti-lock braking system etc.

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