Motor insurers put penalty on silence

MOTORISTS who fail to tell their insurance companies about damage to or theft from their cars - even if they are not making a claim - could find later claims are turned down, writes Nic Cicutti.

Insurance companies say they should be told about all cases of damage or theft because it could affect the cost or availability of future cover.

The insurers' stance could affect thousands of people who do not report minor incidents because they do not want to lose their no-claims bonus.

A spokesman for Eagle Star said: 'It comes down to what is material information. For instance, knocking a wing mirror off in a parking manoeuvre is one thing, crashing into a car is another.'

Norwich Union said it recently turned down a claim from a London motorist for thousands of pounds after his high-performance car was stolen and was later found stripped bare.

'The car was not garaged, and there had been two previous break-ins he had not claimed for,' a spokesman said. 'The owner went to the Insurance Ombudsman. We argued we would never have insured it had we known about the thefts, and the Ombudsman found in our favour.'

However, if they do come clean, motorists may find their premiums rise anyway.

Murray Jones, senior researcher at the Consumers' Association, said: 'Most proposal forms have clauses telling you to tell them anything and everything. But you should be able to tag it for information only.

'People should not worry that their no-claims discount is going to be reduced. The discount is independent of any other risk assessment.'