One in six Kiwis lie about their car insurance

Monday, 20 July 2020

Zuzana Chovanova first time car buyer through a dealer ended up in a very expensive loan/insurance arrangement not realising what she was being sold, or the final cost.

According to a new study, a sixth of Kiwis have lied on their car insurance applications, risking their claims being rejected.

The research, conducted by car insurance comparison site Finder, asked 2143 respondents about their car insurance. Around 15 per cent said they were not entirely truthful when applying for insurance, equivalent to around 552,000 New Zealanders if we stretch that to its credible limits.

The most common fib was claiming they parked in a garage when not in use, with 36 per cent admitting that wasn’t the case. A further 28 per cent said they failed to list a driver on their policy.

Lying on your car insurance could result in actually being uninsured when you need it most.

Rounding out the top three lies is underreporting the distance driven, with 16 per cent knocking a few kays off their insurance application.

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If you don’t list someone as a driver of your car and they bin it, you might still get a payout but with a larger excess.

Kevin McHugh, Finder’s publisher in New Zealand, has warned drivers that being deceptive on their car insurance application is going to hurt them down the track.

“Insurers do not take kindly to dishonesty. What may seem like a little white lie can end up costing you big if you need to make a claim.”

“The trap that people fall into is the prospect of a cheaper premium, combined with an ‘it won’t happen to me’ attitude.”

“This is a recipe for disaster that can leave you uninsured and out of pocket.

Dividing by generation, 52 per cent of Baby Boomers said their car was parked in a garage when it wasn’t, while 45 per cent of Gen X made this claim, as well as 39 per cent of Millennials.

Failing to list a driver was the most common lie told by Gen Z where 30 per cent of respondents admitted to doing this.

Gen Z are also the most likely to lie about the age of the driver, with 20 per cent claiming they have done so. This is compared to 18 per cent of Gen X, 11 per cent of Millennials and just 7 per cent of Boomers.

McHugh said that failing to declare information in your application can be considered non-disclosure when you come to make a claim.

“Honesty really is the best policy when applying for car insurance. There are other ways to lower your premium price that won’t come back to bite you down the line. Opting for a higher excess, parking your car securely under a carport or in a garage, and installing an alarm can all help to decrease the cost of your premium.”