Speed Awareness Courses

[michael769]

It may however be a "material fact" which, if not disclosed, may void one's insurance, although I believe it is unlikely to do so. Maybe Michael769 will be able to help with this?

As you have not been convicted of any offence (or admitted guilt by accepting a FPN or COFP), you are, under Common Law, not guilty of any offense, so technically there is nothing to tell them in that regard.

But you are required to tell them of any pending prosecutions, ie you needed to tell them when the NIP (whether issued by means of a S.170 notice or verbally by a police officer) was issued. So they would (should) have a paper trail that you were facing a prosecution and if you subsequently did not report a conviction/dropped prosecution that is likely to throw up a red flag in the fraud database, which could lead to an inquiry (and attendant delays in paying out) in the event of a claim. So it would, IMHO, be prudent to advise them that the matter was dealt with without recourse to a prosecution or fixed penalty, to get the pending marker removed. There is no reason not to tell them you accepted a SAC as it should not impact your premiums (just as a single 3 point SP10 endorsement would not) unless you are in a high risk category.

Obviously any failure to mention a pending prosecution is in itself a material breach of the policy terms even if it does not result in a conviction or fixed penalty, so if you said nothing at all you could still have issues with future claims if it ever came to light.

[Custom24]

surely once you have completed the course there is no longer a pending prosecution?

[michael769]

surely once you have completed the course there is no longer a pending prosecution?

That is correct. The point I was making is that you do need to tell them about the pending prosecution up front. Once the course is done you are advised to tell them it is no longer pending otherwise they might at a later date ask you to explain what happened with the pending prosecution. A long standing pending prosecution is one of the things that shows up as a red flag during a claim. Even though it should not prevent a claim being paid said red flag is likely to trigger a full inquiry into the claim and that can result in it taking much longer to resolve.

[GJD]

A long standing pending prosecution is one of the things that shows up as a red flag during a claim.

Is there any other way (i.e. besides the policy holder telling them) of the insurance industry finding out about pending prosecutions then? I'd have thought the sort of person likely to try and conceal a conviction isn't the sort of person likely to admit a pending prosecution. So unless the insurance industry can find out about pending prosecutions by independent means, I'd have thought a long standing pending prosecution would be much more likely to indicate an honest but forgetful policyholder making the mistake you allude to, or a case that is genuinely dragging on for some reason, rather than someone actually hiding something.

[michael769]

Is there any other way (i.e. besides the policy holder telling them) of the insurance industry finding out about pending prosecutions then? I'd have thought the sort of person likely to try and conceal a conviction isn't the sort of person likely to admit a pending prosecution. So unless the insurance industry can find out about pending prosecutions by independent means,

It is hard to find out such info by independent means as it is considered as "sensitive data" for the purposes of the Data protection Act which means the ability to lawfully share such info with 3Ps is very limited.

There is an anti-fraud database that is shared throughout the insurance and financial services industry. The most common way to find out about undeclared info is when an insured tells another insurer or lender and it gets into the database. The other way is when they call up to make a claim. Most folks are a little stressed at that point and forget what they have and have not told their insurer, and often mention something at that point - this is by far the richest source for finding out all the little things that some folks fail to mention.

I'd have thought a long standing pending prosecution would be much more likely to indicate an honest but forgetful policyholder making the mistake you allude to, or a case that is genuinely dragging on for some reason, rather than someone actually hiding something.

The vast majority of pending prosecutions result in a conviction within 9 months, and are reported as such by policyholders. Failed/dropped/dragging on prosecutions while not exactly rare represent a very small proportion of such cases. In the experience of fraud investigators by far the majority of longstanding pending prosecutions, when investigated, reveal a failure to report a conviction. As a result a longstanding pending is viewed as a very high risk factor for fraud. It does not in itself result in a failure to pay out on a claim, but it does cause the claim to be investigated in greater detail and that delays the conclusion of a claim.

[GJD]

In the experience of fraud investigators by far the majority of longstanding pending prosecutions, when investigated, reveal a failure to report a conviction.

Interesting. What if it happens the other way around - the insured reports a conviction but hadn't previously reported a pending prosecution. Is that bad? Although I think I've been asked about pending prosecutions at the time of requesting a quote, I don't think it would have occurred to me to report one if it came up mid-way through the policy term. Partly because I'm not sure I know precisely what constitutes a pending prosecution anyway, but mostly because until the point of being convicted, on the basis of innocent until proven guilty it wouldn't occur to me that it's any of the insurance company's business [*].

So while I would certainly report any conviction, I can easily imagine doing so without having reported the pending prosecution first. Could that get me in trouble?

[*] Yes, I know it doesn't matter what occurs to me, it matters what the Ts & Cs of the policy say

[michael769]

What if it happens the other way around - the insured reports a conviction but hadn't previously reported a pending prosecution. Is that bad?

In theory it is a material breach of the duty of disclosure contained in the policy conditions. In practice this senario would be considered as "owning up" so there would be no problem unless a claim had been made since the time at which you became aware of the pending prosecution.

Although I think I've been asked about pending prosecutions at the time of requesting a quote, I don't think it would have occurred to me to report one if it came up mid-way through the policy term.

Most policy has a section that covers the requirement to notify your insurer of material changes ans usually gives a list of examples of the kind of thing covered. Under pressure from the ABI and the government most insurers are trying top make this section ever more prominent, and I you order by telephone you will almost certainly get a verbal warning from the salesperson.

The industries apparent inability to sufficiently educate many of its customers about this stuff is viewed as one of the most serious problems it faces. The ABI has been trying to improve this for years, both by issuing regular warnings in the media and trying to get insurers to improve their documentation, and the financial ombudsman has adopted a zero tolerance approach against insueres who do not make this obligation sufficiently clear.

Partly because I'm not sure I know precisely what constitutes a pending prosecution anyway, but mostly because until the point of being convicted, on the basis of innocent until proven guilty it wouldn't occur to me that it's any of the insurance company's business [*].

A pending prosecution is where you have been informed that it is likely that you will be prosecuted. For most people this will be when you receive a notice of intended prosecution, either verbally by a police officer or by post via a Sect.170 notice.

It is the insurance companies business because when you accepted the policy you agreed as part of a binding contract (the policy terms and conditions) to do so. If you have an accident you quite reasonably expect the insurer to fulfil their part of the agreement to pay out on the claim, in return your insurer expects you to fulfil your parts of the agreement. Such information also has a material impact on the level of risk you present to the insurer and they may need to change their premiums if the perceived level of risk has become too high.

I can easily imagine doing so without having reported the pending prosecution first. Could that get me in trouble?

As I mentioned above if you notified a conviction without previously notifying the pending as long as there had been claim there would probably be no problem (other that a mild lecture from the insurer asking you to take more care in the future)

If you had to make a claim before you got round to reporting the conviction it is a completely different matter though. By failing to comply with your contractual obligations to do so you have committed a material breach of contract. If the breach is discovered, your insurer has the right revoke your policy without any warning or refund (backdated to the time of the breach) and can refuse to pay out on any claim. This can potentially have very serious consequences, for example you may have to foot the bill for third party damages out of your own pocket (which in extreme cases could result in bankruptcy and the loss of your home and other high value assets), and be convicted of driving without a valid insurance policy. Even if you are not to blame for the incident, uninsured drivers can find it much more difficult to recover their losses. It may also result in you (and your household) being recorded in the financial services fraud prevention database as fraud risks which will make insurance (not just car insurance but all types!) and other financial services substantially more expensive for everyone in your household for many years to come.

It does not always come down to that though, ABI guidelines require that such action is not taken if the change would not have a significant impact on the premiums, many people get caught out by minor oversights and are given the benefit of the doubt, but just as many find themselves in the situation I outline above.