‘My son made a silly mistake – does he need to declare it to car insurance companies?’ | Money News

Every Saturday, we help a reader with their consumer issue or personal finance dilemma in our Money Problem series. You can send yours to moneyblog@sky.uk. Today we’re tackling this one from Daniel…

When my son passed his driving test several years ago, he fitted a black box to his car to reduce his premium. Being young and silly, he exceeded the speed limit, which the box obviously detected. He was immediately informed his insurance was cancelled and he had to find an alternative company. The problem is this offence never goes away. When he looks to take out any form of insurance, he gets asked the question “have you ever had insurance cancelled, declined or refused?”. He answers yes, and the choice of companies is narrowed, and the price is always a lot higher than if he had said no. The comparison websites never allow you to explain what exactly happened. I too was recently asked “has anyone in your household ever been refused insurance”. I accept he should have been punished for his misdemeanour, but surely not for the rest of his life (or mine). Do you think after a set amount of time he could deny it was cancelled?
Daniel Hutchinson

Money live reporter Jess Sharp tackles this one…

Hi Daniel. Thanks for getting in touch. This is an interesting problem – and while the answer is fairly straightforward, it’s probably pretty disappointing.

Unfortunately, the basic answer is no, he can’t deny it after a set amount of time.

Insurers do check whether you’ve had a policy cancelled and you should always disclose it if asked. This is because they rely on accurate information to assess risk and price policies.

“If you untruthfully answer a question – or agree with an inaccurate assumption – when applying for insurance, you risk invalidating the policy,” Dean Sobers, car insurance expert at Which?, told us.

“This means that if an insurer asks if you or someone living with you has ‘ever’ had a policy cancelled by an insurer, you need to say if this happened – even if it was 20 years ago.

“The yes/no format of the question – without allowing room for context – is one of the more unfair quirks of insurance. You can usually stop declaring the motor offence itself after about five years – but the consequent policy cancellation often needs to be admitted to indefinitely.”

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How long does cancelled insurance last on your record?

Most comparison sites and insurers ask about cancelled policies when you get a quote or try to arrange cover.

Some insurers will ask about a specific period, such as the past five years, while others ask if it has ever happened so it’s important to read the question carefully.

There’s no single public rule that applies to every insurer when it comes to how long a cancelled insurance policy stays on your record.

Kara Gammell, car insurance expert at MoneySuperMarket, said: “It’s worth noting that some insurers only ask about your history over a set period, so in certain situations it may not always need to be disclosed – but this depends entirely on how the question is worded, so it’s important to answer exactly what’s being asked.

“Unfortunately, a cancelled policy doesn’t simply ‘fall off’ your record. In many cases, it can remain there permanently, making it harder and often more expensive to find cover in the future, which is why your son may be seeing fewer insurers willing to quote or higher premiums.”

Sobers added: “There aren’t general rules dictating a time period after which a past issue becomes irrelevant. Insurers take different stances.”

More from this series:
‘Help! My number plate has been cloned’
‘I lied at the pharmacy – will I get caught?’
‘I’m terminally ill and my insurer won’t pay out’

What can you do moving forward?

While the cancelled policy will remain on your son’s record, it will have less of an impact over time.

“If there are no further issues, some insurers may become more flexible after a number of claim-free and incident-free years and premiums may gradually improve,” Gammell said.

“For some types of insurance, such as home cover, insurers may consider the wider household when assessing risk, while car insurance is usually based on the individual – although a cancellation can still affect joint or named-driver policies.”

To try to secure the best deal available, Sobers said it could be worth calling an insurer – this way they might be able to take additional information into account.

If you’re having real difficulty getting affordable insurance directly, you could also try a specialist broker, he added.

Gammell agreed, adding: “The best approach is to remain transparent, shop around – including specialist providers where needed – and focus on building a strong, clean history over time to help improve your options.”

If you’re tempted to lie – don’t

At best, lying to your insurer could mean that any future claims you make will be rejected.

You also risk your policy being invalidated, leaving you driving uninsured.

In the worst case, you could face fines, prosecution or a criminal record if you are found guilty of fraud.

If this were to happen, you could have your name added to the Insurance Fraud Register, which is an industry-wide database used by insurers to make underwriting decisions and assess claims.

We checked with the IFR and there are 21,241 people listed on the register.

Being listed on there could affect all your future insurance applications, not just your car insurance. It may also affect your credit rating.