This blunder could void your car insurance
Robert Powell investigates how voluntary work affects your car insurance...
From parliament to primary schools, volunteers play a valuable and vital role in British society.
But if you’re a voluntary worker, your goodwill could be having an unexpected impact on your car insurance.
One lovemoney.com reader contacted us after she was told by her insurer that not disclosing voluntary work at her son’s school – even if it did not involve her car – could void any claims made on the policy.
Indeed, it seems that the rules and regulations surrounding voluntary work and car insurance are anything but clear.
Big society car cover
Many car insurers used to insist that motorists inform them of any voluntary work when taking out a policy. From here, prices for volunteers were often inflated, as some insurers defined voluntary driving as ‘business miles’ rather than ‘domestic, social and pleasure’.
However as of August 2011, most insurance providers abandoned this practice and signed up to a new ABI commitment promising volunteer motorists that they would not be charged extra premiums.
The commitment covers 54 insurers making up over 85% of the motor insurance market and was drawn up on the back of the government’s ‘big society’ initiative. Major insurers that signed up to the commitment include Allianz, Admiral, AA, Aviva, Ageas, Churchill, Direct Line, Esure and Swiftcover.
You can find out if your car insurance provider has signed up to this commitment by going to the ABI website.
Voided for volunteering
However one lovemoney.com reader, Natalie Palmer, a homemaker from Norwich, contacted us after her insurer, The Green Insurance Company, said that any undisclosed volunteer work – even if it did not involve a car – would void her policy.
Ms Palmer made it clear to the insurance salesperson that she helped out at her son’s school during swimming lessons and school trips, but never used her car.
Throughout the discussion, Ms Palmer said the Green Insurance operator spoke to the underwriter three times.
In this case, the policy was underwritten by Allianz plc: an insurer covered by the ABI ‘big society’ commitment. However, Allianz do state that customers who intend on driving for volunteer purposes should inform their insurer or – if they bought through a broker – their broker, of their intentions to drive as a volunteer.
Indeed, several insurers listed under the ABI commitment require customers to make this disclosure. So it’s important to check this ABI list if you do plan on using your car for volunteer work, and then inform your insurer or broker if appropriate. As if you fail to, this could void your policy.
If your insurer has signed up to the ABI commitment you should not see any premium uplift.
Volunteer or homemaker
Of course, it’s completely reasonable for The Green Insurance Company and Allianz to require disclosure of any planned volunteer driving (in line with Allianz’s ABI commitment).
However in this case, Ms Palmer was not using her car for any voluntary work. But nevertheless, the job occupation on her policy was listed as voluntary worker, not homemaker.
Figures from confused.com show that the average annual premium for a voluntary worker is £1,223.8. While the same figure for a ‘housewife’ is £848.35 and a ‘househusband’: £848.35.
Obviously the exact premium will depend on several factors, not just occupation. But nevertheless, the difference in price between voluntary worker and homemaker is significantly large.
Non-disclosure of occupation is also an issue. For example, if Ms Palmer did make a claim, but Allianz and The Green Insurance Company found out that she was a homemaker, not a voluntary worker (as listed), would the policy still pay out?
The Green Insurance Company said that if required, they would follow up any concerns with Ms Palmer and that generally if a car was not being used for volunteer work it would not impact on the policy.
But confusion surrounding occupations points to another general car insurance grey area.
Defining your job
At what point does a homemaker who volunteers part-time become an official ‘voluntary worker’ in the eyes of a car insurer? After all – as the ABI clarified to me – there is no such thing as a ‘professional volunteer’.
Ultimately it boils down to what is a reasonable description of your profession. If you spend 45 hours a week working unpaid, then it’s fair to say you’re job description would be a ‘voluntary worker’.
However if you only volunteer for a few hours a week and spend the rest of your time looking after a home: you’d be a homemaker.
This ambiguity is not a problem that’s unique to voluntary workers. But it can, occasionally work to the advantage of the motorist.
Tweaking your title
If I was to apply for a car insurance policy, would I be classed as ‘journalist’, ‘copywriter’, ‘editorial staff’ or ‘reporter’? Any of these four classifications could reasonably describe my job, but each comes with a separately priced premium.
Well, to ensure I was getting the best deal I’d check my job and premium using this handy tool and opt for the description with the cheapest price.
But remember, the title you choose does have to accurately describe your profession. It’s no use lying about your job just for cheaper premiums, as if you do make a claim – you could see it voided under non-disclosure.
Finally, if you think that your car insurer is treating you unfairly or overcharging you wrongly take a look at our guide outlining how to complain and get your way.
Have you had any bad experience with car insurers not paying out for spurious reasons?
Let us know using the comment box below.