Five fibs that make your insurance worthless
MSN Money / 13th March 2009
In day-to-day life it's widely accepted that the odd white lie can go a long way: "Sorry I'm late, I missed the bus,"; "No, of course you don't look fat!"; "Sorry sir, the dog ate it."

When it comes to insurance, however, fibbing can have serious consequences. Being economical with the truth - whether this involves telling outright lies or simply failing to disclose important information - amounts to fraud and could end up costing you thousands of pounds. Tall tales on the up According to AA Insurance, there has been a 30% increase in the number of car insurance claims refused by insurers over the past six months. It seems companies are cracking down on dishonest customers and refusing to pay out where they have been misinformed. Here are details of five untruths you might be tempted to tell your insurer - and why you should avoid them. Compare quotes on car insurance 1. "I'm the main driver" Telling an insurer you are the main driver of a vehicle when you aren't is known among insurers as 'fronting'. This can be a particular temptation for the parents of young motorists, because the cost of an insurance policy where their son or daughter is named as the main driver is likely to be high. If a fraud of this kind is discovered by your insurer, your policy is likely to be deemed invalid. In the event of an accident, this could mean the owner of the fronted car is left with no compensation for damage to their vehicle and may face a bill for the cost of repairing any other cars involved. AA Insurance reports one fronting case where a young man wrote off his car after claiming that his father was the main driver of the vehicle. No payout was made for the loss of the car and the family now face third party costs because there was another driver involved in the collision. Altogether, they are more than £12,000 out of pocket - and this sum could increase further. 2. "I have no convictions" While those with a history of driving offences generally pay more for car insurance, lying about your past could prove to be a false economy. Most insurers will declare your policy void if they discover you have not been honest. As a general rule, you must tell your insurer if you have been convicted of a driving offence within the last five years. That's even if they do not ask directly and even if the offence did not result in an insurance claim. If you have been convicted of offences in the past, it's probable your insurer will view you as a higher risk customer than an individual with no convictions. Therefore, your premiums are likely to be more expensive. If you receive a motoring conviction after taking out your insurance policy, you must still tell your insurer. Unfortunately, this will probably increase the price of your insurance when it comes up for renewal. 3. "I've never made a claim before" If you have had an accident or made an insurance claim in the past three years, you must disclose this to your insurer. This rule applies even when an accident was not your fault. This is because your insurance history will be taken into account when your insurance provider calculates the risk you pose as a customer and in turn works out how much you should pay for your policy. If this calculation is based on false or incomplete information, your insurance policy will be, too - and your insurer could therefore refuse to pay out should you try to make a claim. 4. "My car has no modifications" Making modifications to your car will affect how an insurer views the vehicle. This is because modified cars are widely regarded as more likely to be involved in accidents and can be very expensive to repair when they are damaged. If you tell your insurer that your car is unmodified when it has been altered (or fail to tell you insurer when new modifications are made) this could invalidate your policy. This AA Insurance case study shows how much this could cost a dishonest driver: a man took out his insurance policy, claiming that his Citroen Saxo car was unmodified when it had in fact undergone extensive modifications. He then had an accident. The man's insurer deemed his vehicle had been transformed from its original state into a high-performance sports car and refused to honour his claim. This left the driver with a vehicle repair bill in excess of £5,000. 5. "This is where the car will be kept and driven" Where you park and drive your car is likely to have an impact on your insurance premiums, because local crime rates and the frequency of accidents on nearby roads will affect an insurer's calculation of risk. Some drivers try to get around this extra cost by claiming they use and park their vehicle somewhere they do not. However, this is another fib that could invalidate your insurance policy. Serious consequences In addition to all of the above, it's worth remembering that once you've had an insurance policy voided, you will probably have to declare this to a future insurer. This may mean you face very high premiums or are refused cover altogether. BeatThatQuote.com's head of insurance, Steve Waller, points out that insurance fraud could also have more severe consequences: "If you give incorrect information to try and reduce your insurance premiums, you could find claims are not paid, your insurance is cancelled without your premium being returned and - worst of all - you could end up with a criminal record. It simply isn't worth the risk."