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UK Financial and Insurance Update, July 2007

July 2007

Job Titles Make a Difference in Car Insurance Premiums
How do you describe your job when you fill out a form? According to a leading insurance comparison website, how you describe what you do for a living can affect how much you pay for car insurance.

The managing director of the website says that insurers keep a record of claims based on the job title of the person making the claim. If there are a large number of claims from those claiming a specific job title, using that description can cost an applicant more than someone who does the same job but describes their position differently.

For example, someone who says that they are a “barrister” on the car insurance application will be charged an average of 22 percent more than someone who says they are a “lawyer”. A “journalist” is likely to pay up to 33 percent less for their car insurance than someone who says they are a “newspaper reporter”.

There are a number of legitimate ways to describe most jobs, according to the website’s managing director, and by shopping around for quotes using various job titles it can be possible to find a better rate. The website points out, however, that lying on an application can invalidate a policy, so while it is fine to state your profession in a way that will bring you the best possible premium, it isn’t a good idea to claim a job title that has no relation to what you do for a living.


How Young Drivers Can Save On Car Insurance
Young drivers have been advised that the sooner they climb onto the car insurance ladder, the sooner they will start to make savings on their car insurance premiums.

According to the British Insurers Brokers' Association (Biba), while opting to be a named driver on a parent's insurance policy rather than taking out full cover in their own right may be cheaper for young drivers in the short term, they risk losing out on benefits in the long term.

Graeme Trudgill, technical services manager at Biba, outlined that after a year of safe driving with their own insurance policy, young adults can expect a 30 per cent discount on their original fee. Moving on, a further 40 per cent can be saved after a second year with no claims, a discount of five per cent is usual after a third year, 60 per cent after a fourth and 65 per cent after a fifth.

"The crunch ages are 21 and 25 that's when prices do reduce dramatically, 17 is very expensive, if you're 18 you'll get a discount, if you're 19 you'll get a further discount because at least you've got a year or two years' experience," he commented.

"All the time you've had your licence for less than one year you'll find that your excess is probably higher so once you've passed your test and you've been driving for a year on a full licence then you should notice that your insurance is getting cheaper because of that."

In addition to this, Mr Trudgill also advised that savings could be made on car insurance by people who had recently passed their test if they opt for a "sensible" choice of car. Too often young drivers can be seen in a fast, sporty car model which carries greater risk not only to the driver but also to other cars, he says.

Meanwhile, modifications - such as alloy wheels - to cars should be kept at a minimum, Mr Trudgill concludes, as these also raise the insurance premium and are considered an "insurance nightmare".


Millions of motorists have 'invalid insurance'
Almost 2.5 million UK motorists could be driving with invalid car insurance and a further 6% of vehicles are uninsured, price comparison site claimed today.

The website said that 10% of drivers lie to car insurance providers when buying a policy, which can invalidate their purchase. They typically lie about convictions for speeding or drink driving, their age and address and no claims bonus, and where the car is parked at night.

Aron Thompson, head of insurance at, said: "With many consumers seeing car insurance as a grudge purchase, it's no great surprise to see people either withhold or knowingly provide inaccurate, crucial information in order to get cheaper cover.

"To the consumer, this may seem like a little white lie to save money. In reality, it could end up teaching the driver a costly lesson - on average £1,636 - as the provider is under no obligation to settle a claim based on a policy that is inaccurate."

Those that drive all or part of the way to work often hold back the full truth about their journey, choosing to cover their car just for social, domestic and pleasure use, and not commuting. People who drive to the station and continue their journey by train, however, can be considered to be using their car to commute.

Surprisingly, of the 15% of drivers who said they were aware that they had provided inaccurate information to their insurer regarding the use of their car, more than three-quarters were seemingly prepared to take the risk, and did so in the knowledge it could impact on the validity of their car insurance.

Of those who were aware of the consequences, around one in 10 (9%) said they did it to keep the cost of their cover down. More than a third of people claimed it was a genuine mistake, while 16% said they didn't understand the questions in the application.


Churchill Car insurance company reveals new driver stats
Car insurance company Churchill has released new statistics which show that the majority of learner drivers take at least one year to pass their test. The research follows government proposals to introduce a minimum 12 month learning period for novice motorists in a bid to make Britain's roads safer.

According to Churchill, just 30 per cent of new drivers pass their test within a year of starting to learn, while the remaining 70 per cent do so after 12 months or more. In terms of lessons, 64 per cent of drivers require 30 sessions or more before they are able to pass, and seven per cent require more than 100.

These figures, the car insurance firm claims, show how prudent the government's plans are and demonstrate the importance of taking time to develop confidence and hazard perception on the roads.

Frances Browning, spokesperson for Churchill Car Insurance said: "Learner drivers need to accept that an investment of time, money and commitment are necessary to make them fully-equipped and confident motorists."

As well as learning for a minimum of 12 months there are also calls for new drivers to be given psychological assessments before they can be granted a full licence.