One in five ‘economical’ with truth when applying for home insurance

Many people aren’t completely truthful when buying home insurance if it means they might save a few quid, new research shows. insurance

Even though the vast majority of consumers know they should be completely honest, one in five say they have been ‘economical’ with the truth when taking out cover, a survey by online financial comparison site GoCompare reveals.

It’s a way of ‘getting back’ at insurers

GoCompare polled 2,000 of its customers and found that almost one in five had deliberately not given the correct information to insurers or insurance brokers when they took out cover.

Most felt that such deviousness was a way of essentially getting their own back on insurance providers. Over 50% of those who took part in the poll stated they thought it was fine to lie, or at least not tell the whole truth, when taking out cover as they felt insurers ‘charged too much’.

Home security most common area fibbed about

The areas where insurance applicants most commonly told fibs involved home security.

Just over one in ten hadn’t been totally truthful about the types of locks they had on their home’s doors and windows. And roughly the same numbers had told an insurer that they lived on a street which was in an ‘active’ Neighbourhood Watch area when they didn’t.

Another five percent of those polled said they had lied about their smoking habit, and the same number told an insurer their homes were occupied during the day when they weren’t.

‘But it’s not fraud, is it?!’

Whether those surveyed were being disingenuous or not, one in four believed that by not telling insurers the whole truth when completing insurance applications they weren’t committing fraud.

Likewise, the same number didn’t think that exaggerating the truth when claiming was fraud either. Almost one in three, 30%, thought that everyone did so, so it was okay for them to do the same.

However, only 4% said they had lied about the value of the contents they were claiming for which had been lost or stolen; so when it actually came to making a claim, and putting a signature on a falsified claim application, most people decided (wisely!) that they wouldn’t.

Risking financial disaster

The problem is that those who deliberately lie or withhold information when they take out their cover risk financial ruin.

If something subsequently goes wrong and a claim is made, whether that claim involves the contents of a home or the building’s structure, and the insurer discovers during the claims process that the claimant hasn’t been honest about their home, possessions and personal circumstances, they can justifiably reject the claim completely.

Examples where a homeowner could suffer severely

You might, for example, have a loft bedroom with an en-suite bathroom, but decide not to tell your insurer about it as you’ve found out that an extra bedroom would put up your cover by £50 a year.

But if the bath in the en-suite bathroom then overflowed one day, or a pipe burst, flooding the bedroom, and ruining carpets and electrics, and taking the ceiling below down, you could be in serious financial trouble.

For a claim such as that, possibly involving thousands of pounds worth of damage, most insurers would send a claims investigator to the property.

The investigator would realise the loft bedroom hadn’t been mentioned when cover was applied for, so essentially didn’t ‘exist’ in the eyes of the insurer. The claim would be denied and the homeowner left to foot a bill for thousands of pounds.

Likewise, if you claim for a burglary after exaggerating the level of security on your home, such as better locks than you actually have, there’s a good chance the insurer will find out about it and, again, deny the claim.

Cover costs would rocket

Additionally, anyone who has been caught out would find that the information would go on a database used by most insurers so that any cover subsequently sought could either be hard to find or very expensive.

It’s not worth it

As Gocompare’s insurance spokesperson, Ben Wilson, understatedly said: “Far from saving you money, telling a few fibs when getting a quote could come back to bite you should you need to make a claim and may even lead to your policy being cancelled or invalidated”.

So by being ‘economical’ with the truth, consumers could be looking at a world of financial pain, possibly for many years to come and not just when a claim is made. It’s simply not worth the risk.

Policy Expert

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