Disclosing a previous claim to insurer

EachSmallChime

I had a small rear ending incident in October 2013. Nothing arose from the incident for a number of months and I changed my insurer in that time.

A claim came through and has since been paid out but in that 5 years I never told my current insurer. Simply auto renewed each year.

Am I currently running the risk of them not paying out if I had an accident tomorrow because I never told them? I have four and a half years no claims with this insurer. Should I tell them now?

whomitconcerns

Most ask about all accidents in the last 5 years. If so you would be in beach of the policy terms so should tell them

Esel

I'm not an expert, but I think if you tell them they may well cancel your policy, making it very difficult to get insurance again. I'm not saying you shouldn't tell them though.

Maybe one of the experts on this forum can advise you better.

whomitconcerns

Well there is no two ways about it. Expert or not. As it stands now, if you were to make a claim, they could refuse to pay out anything to you, and if they had to pay out to a third party, they could seek to recover from you directly!

Edit: you are actually outside the 5 years now. So see what your policy actually says

Henry Ford III

EachSmallChime wrote: »

I had a small rear ending incident in October 2013. Nothing arose from the incident for a number of months and I changed my insurer in that time.

A claim came through and has since been paid out but in that 5 years I never told my current insurer. Simply auto renewed each year.

Am I currently running the risk of them not paying out if I had an accident tomorrow because I never told them? I have four and a half years no claims with this insurer. Should I tell them now?

Why didn't you disclose the accident and claim?

Had your current insurer known about the open claim they might not have even offered you terms.

In any event the 5 years term has now passed so you are possibly ok, but that was as much through good luck as anything else.

EachSmallChime

Thanks for the help folks.

I have basically been the luckiest idiot for the last five years and just didn't realise the significance of telling my current insurer about a claim being processed by my previous insurer.

As soon as it dawned on me how serious this is and that I have been driving around uninsured, I have stopped driving and will not drive until I either tell them or get a new policy.

Taking it all into account right now, I think it's too risky to tell them because they could cancel my policy, destroying my chances of being insured again. My options are to keep the policy open for 6 months until it's time to renew and not drive the car so I won't have a claim. Then not renew and take out a new policy with a new company in October

OR, cancel my policy with my current insurer mid-term, take out a new policy using the 5 years no claims I've built up and be completely honest with my new insurer

whomitconcerns

Your misunderstanding the issue.

Legally you are insured now. But your insurance companies terms would potentially allow them recover any payments they make in case of an accident.

So you can risk driving, it's not a criminal issue.

Jurgen The German

EachSmallChime wrote: »

I had a small rear ending incident in October 2013. Nothing arose from the incident for a number of months and I changed my insurer in that time.

A claim came through and has since been paid out but in that 5 years I never told my current insurer. Simply auto renewed each year.

Am I currently running the risk of them not paying out if I had an accident tomorrow because I never told them? I have four and a half years no claims with this insurer. Should I tell them now?

They would be within their rights to cancel your policy ab initio which basically means they would cancel it from the day you took your insurance out and give you back all the premiums you have paid. Reason been is that they would not have allowed you to take a policy with them had they been told about the open claim. You have two options.

Either come clean with them and hope they dont decide to apply the letter of their law strictly, or say nothing, drive Miss Daisy until the policy expires and move to another provider.

I'd be leaning towards the latter, the only risk is that if you are involved in an incident between now and renewal date they would be within their rights to refuse to pay any claim to damage on your own car or to seek recovery from you for damage to a third party.

thebiglad

They would only cancel/void the poilcy for a material non-disclosure - failure to notify a claim is unlkely to fall into that category - more likely, if any action at all they would seek to collect the difference in premium you would have paid had they been aware.

Cancellation and particularly voidance are more likely for failure to disclose a serious driving conviction (which had they known they would not have insured you).

Your certificate of claims experience in 2014 would have stated x claims in x years so it would have shown then for the next insurer?

If just a small claim then it would have had little effect on your premium (loss of No Claim Bonus would have been more significant impact).

EachSmallChime

So, I basically made a call on this during the week.

Decided that I couldn't afford to drive for 6 months knowing that if I had an accident, I would be liable to pay any damages. The last claim from 2013 had significant injury payouts that I could never afford on my own.

I also figured that I can't be honest with my current insurer and risk having a policy cancelled/refused. It would effectively mean putting me off the road because my premiums would be in the thousands for years (forever?)

So I cancelled my current policy early and went straight to another broker and was totally honest about the whole thing. I can carry the no-claims bonus from my current policy so I'm not out financially.

NUTLEY BOY

Just to state the main working principle - if you do not disclose a prior accident to a new insurer that is a misrepresentation.

A misrepresentation renders a policy voidable at the option of the insurer to which it was not disclosed.
The point here is that you leave yourself open to voiding of the policy.

If the answer was truthful within the terms of the assumptions that are part of a quotation process there is no problem.
Forgetting to declare something still constitutes non-disclosure.

Markcheese

But if you misrepresent something, (accidentally or not), and then come clean, youre likely to have your policy cancelled, and not be able to get another (as usually you're asked have you had a policy cancelled) , so the incentive is to say nothing...

Del2005

Markcheese wrote: »

But if you misrepresent something, (accidentally or not), and then come clean, youre likely to have your policy cancelled, and not be able to get another (as usually you're asked have you had a policy cancelled) , so the incentive is to say nothing...

They will check your history before making a payout.

Markcheese

Del2005 wrote: »

They will check your history before making a payout.

I don't doubt it,(and I'm not advocating not disclosing), but there is definitely a perverse incentive to stay stum and "hope" you don't have a claim, (especially if you drive an older car on 3rd party insurance),
If you come clean you're likely to have your policy canceled, and be uninsurable and so be off the road,
If you stay stum, you're good unless there is a claim,

UrbanFox

Markcheese wrote: »

But if you misrepresent something, (accidentally or not), and then come clean, youre likely to have your policy cancelled, and not be able to get another (as usually you're asked have you had a policy cancelled) , so the incentive is to say nothing...

Correct.

There well may be financial incentives to say nothing. However, you take one hell of a risk in doing that and leave yourself very exposed.

As noted previously misrepresentation renders the contract voidable at the option of the insurer to which there was non-disclosure.

It is also an offence under the RTA 1961 to make a misrepresentation in relation to obtaining a policy of motor insurance. You can read that as also referring to non-disclosure at renewal time. The duty of disclosure revives each year at renewal.

UrbanFox

whomitconcerns wrote: »

Your misunderstanding the issue.

Legally you are insured now. But your insurance companies terms would potentially allow them recover any payments they make in case of an accident.

So you can risk driving, it's not a criminal issue.

Just to clarify this on the assumption that OP has actually failed to disclose within the criteria set out by the insurers.

Technically, he is not insured - at the option of the insurer - if that non-disclosure is discovered.

If the non-disclosure is discovered and his insurance is voided he will then have committed two potential offences under RTA 1961 ;
1. Driving whilst uninsured
2. Misrepresentation in the obtaining of a motor insurance policy.

Henry Ford III

But the event was 5+ years ago. A fresh policy with a new insurer will mean the O.P. can answer the underwriting questions correctly and without sanction surely?

Jurgen The German

Henry Ford III wrote: »

But the event was 5+ years ago. A fresh policy with a new insurer will mean the O.P. can answer the underwriting questions correctly and without sanction surely?

Correct. The question only relates to the date of incident.

coylemj

Henry Ford III wrote: »

But the event was 5+ years ago. A fresh policy with a new insurer will mean the O.P. can answer the underwriting questions correctly and without sanction surely?

+1 OP has made a full disclosure with the new policy so is 100% covered to drive. Any discussion about the prior situation is flogging a dead horse.