What can invalidate car insurance?

What are the penalties for having invalid car insurance?

Under UK law, you are required to give your insurer accurate answers when buying or renewing a policy. If you don’t - whether intentional or not - you could face higher premiums or a reduced payout.

There is a difference between a careless error and a deliberate one; careless is an honest mistake while deliberate means you planned it. This could lead to a policy being voided, claims being refused and not getting your premium back - or even being guilty of insurance fraud. This has the following penalties:

If you’re found guilty of breaking the Fraud Act 2006, s.1 - ‘Fraud by false representation or failing to disclose information’:

• Up to 6 months’ imprisonment and/or a fine up to the statutory maximum (if charged in a Magistrates’ Court)
• Up to 10 years’ imprisonment and/or a fine (if charged in a Crown Court)

If you’re found guilty of breaking the Road Traffic Act 1988, s.174 (5) - providing a ‘false statement or withholding information to obtain an insurance certificate’:

• Up to 6 months’ imprisonment and/or a fine up to the statutory maximum (if charged in a Magistrates’ Court)
• Up to 2 years’ imprisonment and/or a fine (if charged in a Crown Court)

If you’re found guilty of driving without insurance (under the Road Traffic Act, s. 143):

• A fine
• Discretionary disqualification
• 6 to 8 penalty points

The most common reasons for car insurance to become invalid

Undisclosed modifications

Tell your insurer if you’ve modified your vehicle in any way. Any modification, however minor, could make your policy invalid. You may have to pay extra for the change.

Wrong address, mileage or occupation on your policy

Your insurer uses your postcode, annual mileage and occupation to work out your premium. If you provide a postcode in a ‘safer’ area than where the car is actually kept, significantly underestimate your mileage or provide a lower-risk job title, you could be found guilty of misleading them.

You can even be penalised for honest mistakes e.g. forgetting to update your insurer if you move home or change jobs. You can read more about how the wrong address on your policy can affect your insurance in our guide.

Lapsed or missing MOT

Driving without a valid MOT is an offence that can land you with a fine of up to £1,000 if your car is found to be dangerous. Most insurance policies expect your car to be in roadworthy condition. If you have an accident and it turns out your car wasn’t roadworthy, your insurer could refuse your claim. Write down and set reminders for when your annual MOT is due.

Using the car for the wrong purpose

When you get a quote, you’ll be asked how you plan to use your car:

• Social, domestic and pleasure - Everyday driving e.g. shopping, visiting friends and family.
• Commuting - Generally refers to driving to and from your usual place of work.
• Business use - Primarily for drivers who need to use their car for work-related purposes such as long-distance driving or light goods transportation.

You should tell your insurer if your circumstances change.

Driving under the influence of drink or drugs

Your insurer can refuse to pay for damages if you are found to be driving over the legal limit or under the influence of drugs (including some prescription medicines). Driving under the influence can also leave you with a criminal conviction - which you’ll have to declare to insurers on future policies. If you don’t, your new policy will be invalid.

Not telling the insurer about a change during your policy

Your policy is based on the details you give, so any changes could affect it. Make sure you tell your insurer if you:

• Move house
• Change jobs
• Get a new driving conviction or points
• Have a medical condition you need to inform the DVLA about
• Modify your car
• Change where your car is parked overnight

Letting an unlisted or uninsured driver use your car

Your policy might not allow other people to drive your car. If it does, it’s likely there will be specific criteria e.g. age or number of years’ driving experience.

If others can drive your car, watch out for fronting - a form of fraud where a more experienced driver declares themselves as the main driver, even though a younger, less experienced driver does most of the driving.

If you’re letting someone borrow a car (or need to borrow one yourself), you should consider taking out temporary car insurance. With Tempcover, it’s comprehensive as standard and you choose how long you need cover for.

If you’re using temporary insurance, you should be aware that the temporary policy only applies to the driver named on it. If someone else - other than the main policyholder - wants to take over the driving, they will need their own policy. As with an annual policy, make your quote answers as accurate as possible. Check for spelling errors and incorrect registrations.

What happens if your car insurance is ruled invalid?

The penalties will depend on whether you deliberately misled the insurer, and how serious the issue is.

Your insurer can:

• Refuse your claim - Decline to pay for repairs, provide a replacement car or cover your own costs.
• Ask you to repay costs - If they’ve paid out to a third party,they can ask you to cover these directly.
• Penalise you - Driving without insurance can lead to a £300 fixed penalty and 6 points, and potentially a larger fine if the case goes to court.
• Help seize your car - Police have the power to clamp, seize and even destroy uninsured vehicles.
• Charge higher premiums in the future - Other insurers can see a voided or cancelled policy, which could make future policies more expensive or harder to get.
• Report you for a fraud investigation - If you’ve deliberately misled your insurer, they can ask for you to be investigated and prosecuted.

How to check if your insurance policy is still valid?

1. Check your policy documents
2. Make sure the details are correct
3. If not, declare any changes
4. Check your MOT and tax, and that your car is roadworthy
5. Know where all your documents are
6. Brush up on insurance jargon like ‘material fact’ or void (check our insurance glossary for confirmation)

You should also watch out for hidden insurance costs when you change your details.

What to do if you think your insurance is invalid

If you’re worried your insurance may be invalid, you should try to sort it out straight away. Stay calm and follow these steps:

1. Stop driving if you have any concerns about being uninsured.
2. Contact your insurer to check you have the right cover, or to adjust it if you’ve made an honest mistake. Just remember you may have to pay to do this.
3. Update your details.
4. Get alternative insurance if needed. If you need to drive while you’re sorting things out, you could consider temporary car insurance. Comprehensive as standard, you can choose any time from an hour to 28 days - leaving you with plenty of time to find the right annual policy.

Worried you might be a victim of fraud? Read all about common car insurance scams and our crash for cash guides for things to watch out for.

The Motor Insurers’ Bureau recommends telling your insurer straight away and contacting the Insurance Fraud Bureau Cheatline at 0800 422 0421. You can also report the crime to Report Fraud at 0300 123 2040.

Need cover while you sort things out? Get a quote from Tempcover in minutes.

Sources

https://www.moneyexpert.com/car-insurance/guides/what-does-commuting-mean-on-car-insurance/

https://www.mib.org.uk/learn-about-insurance/avoiding-insurance-scams/

https://www.gov.uk/drug-driving-law