Car insurance: Difference between homemaker and unemployed

[radamfi]

put Independent Means down.

This doesn't seem to be offered by all insurers.

 

[Bletchleyite]

I didn't know that. This should be compulsory for all vehicles.

Why?

This doesn't seem to be offered by all insurers.

Then you choose what's closest to your situation (see the "driveway" issue), or you phone them, describe your situation and ask them what you should put.

 

[Islineclear3_1]

Similarly with mileage. They ask you estimate your mileage, but a year later then can say that you were way out and then you end up going to jail for fraud. Even if you overestimate "to be safe", you are still lying in their eyes.

Really ??

 

[radamfi]

Why?

Because it sounds like a fairer system.

Really ??

I haven't seen any written evidence to show that overestimating is permitted.

 

[AM9]

My current policy, based on an annual mileage of 5000, is considerably cheaper.

Going off-topic for a moment, I wish VED was mileage based.

Having retired 10 years ago the mileage covered each year has slowly reduced until last year when I did less than 3000 miles. I had reduced my insured mileage in steps from 12k down to 5k each time getting a lower premium. This year I had a car change and found out that the current sweet spot is around 5000 miles. Any less than that and some insurers want a slightly higher premium, - maybe the stats indicate that drivers who do very low mileages are not getting enough driving experience to maintain traffic awareness.

... I haven't seen any written evidence to show that overestimating is permitted.

Have you seen any evidence that it isn't permitted?

 

[Bletchleyite]

I haven't seen any written evidence to show that overestimating is permitted.

Humans are complicated things, which is why it's a contract of good faith and doesn't explicitly state everything. Courts would, in the event of a fraud case, take that into account. Like most offences, it requires an element of intent, it's not absolute like e.g. a Railway Byelaw offence of travelling without a valid ticket.

If you take out a policy and answer the questions honestly and to the best of your ability, and if one genuinely doesn't fit you at all you give them a ring and clarify it, you are not going to end up in Court, and if by any unlikely turn of events you did you would not be convicted. Laws against insurance fraud are there for big things, like taking out a building policy then setting fire to it, or taking out a life insurance policy on someone and then arranging for them to be shot.

Absolute worst case would be a cancelled policy. But that too hardly ever happens unless you're dishonest or don't read it properly.

 

[Islineclear3_1]

Humans are complicated things, which is why it's a contract of good faith and doesn't explicitly state everything. Courts would, in the event of a fraud case, take that into account. Like most offences, it requires an element of intent, it's not absolute like e.g. a Railway Byelaw offence of travelling without a valid ticket.

If you take out a policy and answer the questions honestly and to the best of your ability, and if one genuinely doesn't fit you at all you give them a ring and clarify it, you are not going to end up in Court, and if by any unlikely turn of events you did you would not be convicted. Laws against insurance fraud are there for big things, like taking out a building policy then setting fire to it, or taking out a life insurance policy on someone and then arranging for them to be shot.

Absolute worst case would be a cancelled policy. But that too hardly ever happens unless you're dishonest or don't read it properly.

Well said.

And how many people stick with their same insurance companies year after year? I don't know about anyone else but I have never been asked for my actual mileage at the beginning and end of the term - just the estimated annual mileage.

And that is just it - an estimate

 

[87 027]

As others have said, insurance contracts are governed by the legal doctrine of utmost good faith (uberrima fides) meaning all parties must declare all material facts at the formation of the contract so it reflects the actual risk.

There does appear to be a threshold for some insurers at least below which a lower estimated mileage results in higher premiums.

 

[ainsworth74]

It is stupid for insurance to work that way as there is unnecessary ambiguity. A better system would be to tell them the mileage every so often so they can adjust your premium up or down as necessary. The current system just criminalises people. Then this creates unnecessary work for the Ombudsmen when there is a dispute.

I'm quite happy giving my insurer my best good faith estimate of my usage personally. I don't think there's any need for me to report to them more frequently what my usage is other than what I estimate at renewal time and I really don't want to be having to faff with them more than that anyway!

 

[radamfi]

And how many people stick with their same insurance companies year after year? I don't know about anyone else but I have never been asked for my actual mileage at the beginning and end of the term - just the estimated annual mileage.

Until you make a claim or someone makes a claim against you. Then they might check that all the details you provided were correct.

 

[Dai Corner]

Until you make a claim or someone makes a claim against you. Then they might check that all the details you provided were correct.

That's where good faith comes in. If you estimate a low mileage at renewal as you're not working, working at home or get public transport to work but later start driving to a job 50 miles away every day you need to tell your insurer and pay any additional premium they decide to charge.

 

[radamfi]

That's where good faith comes in. If you estimate a low mileage at renewal as you're not working, working at home or get public transport to work but later start driving to a job 50 miles away every day you need to tell your insurer and pay any additional premium they decide to charge.

I don't think there is any doubting that. The big question is whether overestimated mileage needs to be reported.

 

[Bletchleyite]

I don't think there is any doubting that. The big question is whether overestimated mileage needs to be reported.

If you're unsure, ring them and ask. That's how the "good faith" thing works. You need to be satisfied in your mind that you're being honest.

 

[cactustwirly]

Well said.

And how many people stick with their same insurance companies year after year? I don't know about anyone else but I have never been asked for my actual mileage at the beginning and end of the term - just the estimated annual mileage.

And that is just it - an estimate

Except if it's a black box policy, with ludricrious charges to increase the policy miles.

Car insurance quotes give you options of homemaker and unemployed for your occupation. It is recommended by various websites to avoid using "unemployed" because it substantially increases your premium, but under what circumstances are you obliged to state "unemployed"?

I'd say put it down, if you can reasonably prove that you carry out the tasks of a homemaker.
Whilst it is an offence to outright lie about your occupation, you can alter your occupation slightly, this is recommended by Martin Lewis.

See:

Money Saving Expert Car Insurance Tool: Compare job titles and quotes

Try the job title tool from Money Saving Expert for finding the cheapest car insurance by profession. Small, legit changes to your career title can save a bunch.

www.moneysavingexpert.com

The "occupations" that insurance companies use are quite broad, and as such there are multiple listed occupations that fit my job description.

 

[rcro]

I'm pretty certain the claims experience jumps up significantly at annual mileages of 18,000 or more - with a steady increase from c.5,000 upwards. For most motorists the insurance costs will increase with more miles, so any deliberate *significant* under-estimating of mileage could be deemed fraudulent on investigation. Over-estimating means you pay for an inflated risk - so there is no question that the actual risk is covered. That all said, some insurances avoid giving lower mileage customers the opportunity to de-fraud by grouping <18,000 miles all into the same risk category.

Bending the truth on the other questions is a big no if you have to make a claim. The experience for, say, unemployed people seeking work may be different to "homemaker", and the assumed nature of their travel will affect the risk. I'd hazard a guess that neither are going to be particularly good - "unemployed" may be assumed to be more irresponsible, or their ability to pay the premiums for the full term be considered another risk; "homemakers" may do most of their driving on the school run, and to supermarkets - busy areas and times with opportunities for minor bumps and distractions from child passengers.

Other tricks people use to reduce their insurance bill is to pretend they don't "commute" by car, or for young people say the main driver is a parent. In the event of a claim, the insurance company may investigate the customer if they have doubts - they can check credit rating, employment history, MOT mileages, service histories, social media profiles etc. etc.; unfortunately, car insurance fraud is endemic and the major insurers all have fraud teams including private investigators to catch those bending the rules. You might think this is all a bit too much surveillance state, but fraud costs the insurers money, and those costs are then passed back to *all* customers through increased premiums.

Summary - don't ever try to second guess how to reduce your premium without actually changing your lifestyle to match, just put in your details that most closely represent your current/expected situation and then there can be no argument that you have attempted to acquire insurance by false representation.

 

[Alfonso]

You can see the mileage on the last few MOTs by going online. Although that doesn't help you with a new car.

But what I mean is, where is it written down that you are allowed to overestimate your mileage?

You're not overestimating the mileage, you're asking for insurance cover for up to around X thousand miles, based on a reasonable good faith assessment of your need. As others have stated, you can get more insurance later if you need it, and in theory you could notify them if your need reduces, but it's unlikely to result in a refund

 

[87 027]

I would imagine that this year, because of lockdown, a very substantial number of people have driven less than their estimated mileage.

 

[Bletchleyite]

I would imagine that this year, because of lockdown, a very substantial number of people have driven less than their estimated mileage.

There was a big thing about people getting refunds for reducing it. Personally I'm looking like going higher as I've been driving instead of going by train.

 

[Domh245]

There was a big thing about people getting refunds for reducing it. Personally I'm looking like going higher as I've been driving instead of going by train.

They say refund.. It was a blanket £25 from my insurer, which at an £800 something premium (under 25, first policy in my name, etc) was barely worth bothering with, especially as I came in about 2000 miles under my expected 5000 for the year! Better than nothing I suppose, but still

 

[2392]

I would imagine that this year, because of lockdown, a very substantial number of people have driven less than their estimated mileage.

I know I certainly have driven less this year. So far due to the lockdown..........

 

[Mojo]

Mileage is also made available publicly when you look up a vehicle’s MoT report on the gov.uk website.

 

[2392]

Must admit whilst the insurance company quoted on 8,000 miles. In the 3-3 1/2 years I've been back on the road I've only just hit 120,000 and that's from 103,000 when I bought my motor. So I've added 17,000 over that period meaning I've covered about 4,857 or so per year...... What's more I'm quite happy to be insured for 8,000 as that gives me a bit of leeway on the yearly mileage front. If i did need to change it I'd be in touch with them...............

 

[LucyP]

Mileage is also made available publicly when you look up a vehicle’s MoT report on the gov.uk website.

Unless the odometer is broken, which is not checked at the MOT test.

 

[swt_passenger]

So if you are living by yourself and have plenty of savings so you don't need to work for the foreseeable future you have to be "unemployed"? That can't be right. Arguably, putting "unemployed" would be fraud as you are not claiming benefits or looking for work.

That was me. I just said I was retired, at about 50.

 

[Benno]

Because it sounds like a fairer system.



I haven't seen any written evidence to show that overestimating is permitted.

Direct line now offer money back if you drive less miles than you estimate
https://www.directline.com/mileage-moneyback

Mileage is also made available publicly when you look up a vehicle’s MoT report on the gov.uk website.

Which only applies to cars over three years old. If you buy new and change your car every three years you will never have any MOT history.

 

[Camden]

I'm surprised an unpaid line of "work" is listed as an option. It's clearly ambiguous and impossible to prove or disprove.

Myself, I would definitely fit one of the definitions above of "homemaker". However I also have a paying job. Do I really have two jobs just because life is hectic??

Conversely, I also know someone who does indeed call herself a housewife, without any self doubt whatsoever. The children are at boarding school. She has two staff, and doesn't even pour the tea when we go round, let alone use a hoover.

Worth pointing out though that insurance companies computations are not transparent in the slightest anyway. It's entirely possible that homemaker draws negative, rather than positive, weightings.

 

[philthetube]

They say refund.. It was a blanket £25 from my insurer, which at an £800 something premium (under 25, first policy in my name, etc) was barely worth bothering with, especially as I came in about 2000 miles under my expected 5000 for the year! Better than nothing I suppose, but still

\If you haven't done this put an older driver on your policy as a second driver, I saved £150 for my lodger by letting him put my name on the policy, I have only ever driven his car once and that was only to find a parking place.

 

[Bletchleyite]

\If you haven't done this put an older driver on your policy as a second driver, I saved £150 for my lodger by letting him put my name on the policy, I have only ever driven his car once and that was only to find a parking place.

Yep, that's one of the slightly odd "workarounds" that does work and is entirely legit because you might legitimately want them to be able to drive it occasionally e.g. to swap cars over on the driveway/road or on the way to/from the pub or something (unlike putting someone else as the main driver and the actual main driver as a named driver, which is easily detectable fraud).

The reason it's cheaper is that they work out that the lower-risk driver will be driving it some of them time based on a fixed formula, they aren't really interested in the actual proportion.

 

[Domh245]

\If you haven't done this put an older driver on your policy as a second driver, I saved £150 for my lodger by letting him put my name on the policy, I have only ever driven his car once and that was only to find a parking place.

Amusingly, taking my parents off actually saved about £150! I expected savings by taking my dad off as he'd picked up some points, but taking my mum off reduced the price further!

Just goes to show it's worth checking the different permutations, because insurance premiums really do seem to be a lucky dip at times

 

[2392]

It certainly make you wnder how their minds work. When it comes to working out the premium they offer. Something along the lines of.- Provided there's a Q in the day, a Z in the month and the year is exactly divisible by the square root of PI then your quote is £600. If not then its £800.

Edit: I've altered my reply to read square root of PI......