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The reality of misleading your insurer

We are asked for advice every day. Day to day we come across interesting cases and one in particular we will share in this blog post. This is a unique case and the specific person will not be named. We will change certain details to ensure discretion is maintained however we think it is important to share this story as many people do not understand the reality of misleading their insurer.

Background

We will call the individual, who contacted us for advice, Mrs Smith. Mrs Smith was involved in a road traffic accident some years ago. As far as she was concerned, she was not at fault for the accident as the other individual (“Mr Jones”) had ran out in front of her vehicle.

Mrs Smith was relieved that the police had attended the scene and taken statements from independent witnesses and to her knowledge they had compiled a police report. Mrs Smith was compliant with the police and was free to leave once her statement was taken.

A couple of years went by and Mrs Smith was contacted by her insurance company. Mrs Smith’s insurance company advised her that Mr Jones was making a personal injury claim against her policy. It transpired that Mr Jones was claiming he was injured as a result of Mrs Smith’s negligence.

Mrs Smith instructed her insurance company to obtain the police report which included vital witness evidence and advised her insurance company not to settle the personal injury claim as she was not at fault. Mrs Smith’s insurance company contacted the police. It transpired the police had lost/destroyed the police report and accompanying witness details.

Mrs Smith’s insurance company advised her it came down to her word against Mr Jones’word and given there was no independent witness evidence it would be more economical to settle Mr Jones’ personal injury claim opposed to taking the case to trial. Mrs Smith disagreed with this opinion and wanted to go to trial. After a short battle, Mrs Smith’s insurance company settled Mr Jones’ personal injury claim. Mrs Smith’s insurance company paid Mr Jones £50,000.00 in damages for his personal injury claim and £45,000.00 in legal costs.

Payment of £95,000.00

Some months later Mrs Smith was contacted by her insurance company and advised that although they had paid Mr Jones the sum of £95,000.00,  she was now liable to pay back the insurance company due to a breach of her insurance policy.

Mrs Smith was advised that she had failed to advise her insurer of a previous road traffic conviction which subsequently made her insurance policy void. Mrs Smith was only aware of a spent conviction so did not disclose this to her insurer. Mrs Smith is now being sued by her insurance company for £95,000.

Ultimately if her insurance company obtain a Judgment against her to pay the £95,000.00 this will show on her credit file as a County Court Judgment (“CCJ”) which will affect her ability to obtain credit and the insurance company  can enforce that judgment by repossessing her home or any assets she has. This could potentially lead to bankruptcy.

 

 

Points to Take from This Blog Post 

Some people may mislead their insurance company to pay a lesser premium however when it comes down to a claim, do not be naive, your insurance company will scrutinise the insurance policy conditions. That additional £100.00 or £1000 you pay yearly could save you an unnecessary bill of hundreds of thousands of pounds.

Remember your insurance policy, is exactly that, insurance. The policy is taken out to protect you should a claim be presented, it should not be treated as a formality to get your car on the road.

We strongly recommend any driver to check their policy conditions and make sure they are complied with.

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Higgs Newton Kenyon Solicitors is a trading name of UK Law Nationwide Ltd registered in England and Wales under number 08307355. Registered office, 6th Floor, Yorkshire House, 18 Chapel Street, Liverpool, L3 9AG. A list of directors is open for inspection at the registered officer. Any reference to a "Partner" is in reference to a Director or Shareholder of the company. Regulated by the Solicitors Regulation Authority under number 573571. Previously trading as UK Law Solicitors.

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