Save money and read your insurance terms and conditions

Last week’s article about the consequences of insurance non-disclosure reminded a few of our readers of similar experiences they’ve had in the past. It also sparked a few others to remind us all how not reading an insurance contract could end up costing a great deal of money.

Last week’s article about the consequences of insurance non-disclosure reminded a few of our readers of similar experiences they’ve had in the past. It also sparked a few others to remind us all how not reading an insurance contract could end up costing a great deal of money.

Mrs R wrote that, “I too had made a small claim on my first home which I owned before I got married.

“When my husband and I bought our marital home we took out insurance with a difference insurer and I had no idea that my small claim, several years later on a totally different property, had to be declared when we got the new house.

“I was told that if my husband had filled out the policy MY previous claim would never have been discovered, but I put the policy in my name so we ended up with a very big hike the next year, even though the insurer paid out the claim. I”m told we got off lightly.”

Another reader, Mr McD wrote: “I had a claim for damages after the washing machine flooded when we weren’t at home. It ruined some carpets and other soft furnishings, flooring, bookcases, some electrical stuff on the floor of the adjacent living room.

“I had reduced our claims cover a few years earlier because we had got rid of all sorts of heavy, old, but expensive antique furniture at the time, some paintings and jewellery and hundreds of books which I had intentionally insured separately. My full claim for the flood was rejected because the insurer said I was now underinsured.

“The lesson here, is make sure you explain – in writing – if you decide to adjust your policy.”

Then on Wednesday, Joe Duffy of RTE’s Liveline programme spoke to the insurance broker who I referred to in my article regarding non-disclosure of previous house insurance claims. Joe took some calls from his listeners.

The stories that caught my attention the most was the one from a woman whose €250 undisclosed household claim years earlier practically blackballed her from getting any home insurance – she should have challenged that decision with the Financial Ombudsman - and the one from the listener who inadvertently had been driving uninsured for two years because her daughter, a named driver, was paying the insurance premium.

Luckily, no accidents had occurred, but had one happened, or any other claim, the car owner would have been seriously out of pocket and perhaps in trouble with the Gardai, though any third party claims would have been covered by the insurance industry’s compensation scheme.

Meanwhile, another reader, Mr F, who heard me speaking on another popular call-in radio show last week about undeclared penalty points and how these can affect both the cost of a renewal premium and securing cover told his story:

“I ended up with two penalty points soon after I renewed my motor insurance. Someone I knew told me I had to inform the insurer of this and when I got home I called them and was informed that it would cost me €81 to add the points to the policy record - €41 for having more than two points (I have three) and €40 to make a change to the policy. They also said that if I’d have had a crash I wouldn’t have been fully covered, with just third party most likely.”

Insurance brokers tell me that, depending on the insurer and the policy you have, acquiring penalty points AFTER you renew your policy usually only results in a slightly loaded premium the next year and even then, only if you have more than four penalty points. It shouldn’t result in any loss of cover for the duration of your annual contract, even if you pay your policy by the month, instead of in a single, lump sum payment.

The €40 administrative charge isn’t written in stone, either, but is more likely to be charged by the Direct Insurers and not if you use the services of a broker.

Still, with different rules applying to different companies, it is always best to check the policy itself regarding penalty points and non-disclosure.

Meanwhile, here’s another motor insurance nightmare to beware, especially, if like me, you have a young person in the house who is just learning to drive. This story came from the aunt of young fellow, age just 17 and a half, driving his mother’s car in the company of his friends one evening, but without a full licenced driver in the vehicle.

Pulling out of a car parking space at the local shopping centre one evening, he struck an elderly man, who fell to the ground, injured. The boy took off in a panic. Passersby and CCTV cameras caught the car make and plate number and the Gardai were round to his house soon enough.

Not only is he likely to be charged with driving without a full licence and for leaving the scene of an accident - a criminal offense – but possibly reckless driving and he will probably face several years of being banned from driving. His parents could have their insurance policy cancelled, not to mention a huge increase in their next insurance premium.

My son tells me that the waiting list for a driving test is still so long that a number of his friends drive alone on their learner permit (which has replaced the provisional licence) – with their parents’ approval.

More fools them. It won’t be happening in this household.

Money Express with Jill Kerby in association with Aviva