5 car insurance lies that could invalidate your policy

After a year of record price hikes and soaring inflation, some motorists are choosing to be economical with the truth in order to get cheaper car insurance cover.

Over a quarter of drivers have lied to reduce their car insurance premium, according to a survey from The Green Insurer in February 2024. And some drivers don't intend to stop telling fibs: almost a fifth said they would be tempted to continue being dishonest in future if it meant securing lower premiums.

Providing false information, however, can lead to your claim being rejected or your policy cancelled altogether.

Here, Which? reveals the most common car insurance fibs and explains how to cut the cost of cover without stretching the truth.

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The most common car insurance lies

These were the most common fibs that emerged from the survey:

1. Underestimating annual mileage

The biggest falsehood, admitted by over one in five drivers, was to understate their annual mileage. 

Stating a lower annual mileage (typically under 8,000 miles) could reduce your premium as driving less reduces the likelihood that you are in an accident.

2. Where a vehicle is kept

Other fabrications mentioned by respondents include saying that a car is kept in a garage when not in use (6%)

Parking your car on the street rather than in a garage is viewed as more risky by insurers. 

3. The vehicle's security features

Some drivers also falsely claimed to have an immobiliser for their car.

An immobiliser is a safety feature that insurers like and can see your car insurance premiums tumble.

4. What you do for work

Drivers also claimed they had a lower-risk occupation. 

Your job may be viewed as high risk by insurers, but you should never lie about what you do for work. This is considered fraud and you could be prosecuted. 

However, there's nothing wrong with trying to pick the right job title for the type of work you do. For example, there might be the choice of 'kitchen worker' and a 'chef', or a 'writer' and a 'journalist'. In practice, your occupation may be aptly described by any two of these, but the one you choose could make a difference with your insurer. 

5.  Vehicle usage

Another common lie that emerged from the survey was drivers claiming their car was not used for work when it is.

Drivers that use their vehicle for work tend to do more miles than drivers that use their car for leisure, so premiums tend to be higher.

• Find out more: best car insurance companies

Why are drivers telling fibs?

Car insurance premiums have been steadily rising for the past two years, with 2023 seeing costs skyrocket to record levels. The average price of a policy has risen 52% since 2022, according to figures from the Association of British Insurers (ABI). It's surged from £415 in the first quarter of 2022 to £635 between January and March this year.

Younger drivers in particular have been feeling the squeeze. Compare the Market data showed the average price of premiums for under-25s jumped by almost 50% in the 12 months to January 2024 – from £1,365 to £2,009. The comparison site revealed that, as a result of this rise, the total annual cost of running a car is now £3,043 on average for a young driver. This is a 25% increase from last year, when the average running cost was £2,436. 

So it's perhaps unsurprising that The Green Insurer found it was younger people who tended to lie on their car insurance forms. Almost a third of 18 to 24-year-old drivers had a claim rejected because they had provided false information, while no drivers in the 55-to-64 and over-65 age groups had been refused a payout for fibbing.

Drivers aged 65 and over also appear to be the most honest when applying for cover: 83% said they would not provide false information, compared with 63% of drivers between the ages of 18 and 24.

There are some signs that price rises are finally easing, however. ABI data showed the average car insurance premium increased by just 1% between the final three months of 2023 and the first quarter of 2024. This is significantly less than the 12% jump seen between the third and fourth quarter last year. 

• Find out more: what's happening to car insurance premiums?

What can happen if you lie?

At best, lying to your insurer could see your claim rejected. At worst, your policy could be invalidated or – in some serious cases – you could face fines, prosecution or a criminal record. That's because dishonesty, when either applying for cover or making a claim, counts as fraud. 

As a result, you could also potentially have your name added to the Insurance Fraud Register. This is an industry-wide database of known fraudsters, used by insurers when making underwriting decisions and assessing claims. 

If you end up on the list, you could struggle with any future insurance applications, credit rating and mortgage applications.

Honest ways to reduce costs

Yes, prices are still eye-wateringly high – but the risks of lying are simply not worth it. Here, we outline five ways to keep prices down without being dishonest.

1. Shop around

It's a cliche, but seeing what other deals are out there before renewing or buying a new policy is one of the most effective ways to secure lower premiums. 

Price comparison sites such as Compare the Market, Confused.com, GoCompare and MoneySuperMarket allow you to view multiple car insurance quotes at a glance. 

Just remember, not all insurers are on price comparison websites: Which? Recommended Providers Direct Line and NFU Mutual are examples of this.

2. Renew early

Renewing early could also save you hundreds of pounds. 

With car insurance, you'll often get a cheaper price if you buy your cover a few weeks (rather than a few days) in advance of the policy's start date.

Doing your shopping around early also allows you to more widely research the market or negotiate your insurer's price to make sure you get the best deal.

3. Choose annual cover

While paying for insurance in instalments can make the costs easier to manage, interest charged on the monthly payments increases the amount you pay overall. 

Sales data examined by Which? earlier this year revealed that, as of last September, drivers paying monthly were forking out over £300 more, on average, than those who paid in one go. 

If you need to spread your payments, one alternative is to buy cover upfront with an interest-free credit card, and pay off a 12th of the card's balance each month.

• Find out more: best 0% credit cards

4. Check mileage and drive carefully

Less mileage equals lower risk to insurers and therefore cheaper cover. So try to limit the miles you clock up over the year if you can.

If you take out black box insurance, also known as telematics, you may also be rewarded for your efforts to drive carefully. It uses technology to track your car, and data is collected on braking, steering, speed and mileage. Your provider will use that information to decide whether to reward you for your driving skills. 

Benefits can include money off your premium and bonuses such as retail vouchers.  

5. Add a named driver

Adding an older, more experienced driver to your policy can sometimes reduce your annual premium.

But be warned: it's illegal to put someone down as the main driver if this is not the case and can lead to an insurer refusing to pay a claim, cancelling the policy altogether or even taking legal action against you for fraud. 

• Find out more: how to find cheap car insurance

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