When you buy car insurance, you purchase a promise from your insurer to pay for damage to your car and any third parties.
But the big question is, will the insurer void your policy and your claim? Most of the time they won't, particularly if you are meticulous about keeping it up to date, but here is our top tips on how best NOT to void your car insurance.
What information should you disclose?
Each insurer has “underwriting guidelines” on what business it wants to take and on what terms (including premium price, excess levels and so on). If an insurance company can prove it never would have underwritten, for example, a Subaru WRX owned and driven by a 90-year-old person, then it may be in a strong position to deny the claim if full disclosure is not made.
From extreme circumstances, there are less obvious issues that may confront an insured being paid the claim. If something affects the driver’s ability to control a vehicle then the insurance, for all intents and purposes, may be “void”. That may include: driving under any influence of alcohol or drugs (prescription or otherwise); overloading the car or any trailer it may be towing; or failing to reasonably maintain the car to roadworthy condition (such as having bald tyres).
Also beware of giving permission for non-listed persons to drive your car. If in doubt, call your insurer to get approval and make full written disclosure up front.
Keep your car insurer informed with any changes to your personal situation and your car. For example, if you decide to turbo charge your car after you've bought it, its best to tell your insurer. This is part of a customer's “duty of disclosure”. That duty occurs when first taking out the policy and on annual renewal, however it is also a continuing duty – for any time – during the policy’s duration.
Another thing you need to keep front of mind is who uses the car and for what purposes. If you've said your car is for personal use but you actually drive it primarily for business purposes, that could affect your policy. Similarly, if you have an older driver listed as the primary driver, but in reality a younger family member uses it most, this could potentially spell problems.
Pay your premiums on time
One of the most common ways people accidentally void their car insurance is by forgetting to pay their annual premiums. Your insurance will normally send you out a renewal notice and possibly additional reminders – just don't put it in the to-do basket if that's where its going to get lost.