Insurance advice

Lying to your insurer doesn’t always invalidate your claim

Lying to your insurer: New court ruling means lying needn’t necessarily mean a claim can be refused

Imagine your sports bike is stolen, along with the £1,800 exhaust you had fitted a few years ago. You make a claim, including a receipt for the expensive cans.

Except the receipt is not the one you got with the system, you lost that long ago. Instead you printed a new one, technically a false document and which previously would mean the insurance company could throw out the whole claim.

Well, now they can’t.

In a landmark Supreme Court ruling that overturns centuries of insurance practice, ‘collateral lies’ which are untrue, but do not affect the validity of the claim, can be acceptable.

It follows a long-running court case between the owners of a Dutch cargo ship and their insurer where the owners lied about a flooded engine room.

Although the reason they gave for the flooding was false, the court ruled that the lie was irrelevant.

Crucial to the judgement, Supreme Judge Lord Clarke said: ‘”The critical point is that, in the case of a collateral lie….the insured is trying to obtain no more than the law regards as his entitlement, and the lie is irrelevant to the existence of that entitlement. Such a lie is immaterial to the claim.”


Higher insurance costs as a result?

The insurance industry says this could lead to a swathe of false claims that will lead to higher premiums for everyone.

“This decision risks pushing up the cost of insurance and prolonging the pay-out process for the vast majority of people who are honest customers,” said James Dalton, the Association of British Insurers’ director of general insurance policy.

That remains to be seen, but if it puts an end to legitimate claims being thrown out simply because of a mistake or small lie, then the ruling means that thousands of claims that could have been thrown out by insurers will now be settled fairly. That’s a good thing for bikers.

What about mods?

Whether the ruling applies to undeclared modifications to your bike – undeclared to keep your premiums down – is unclear to us right now.

If you’re a lawyer and know the answer, please get in touch so our readers can get the best advice.

Right now we’d say what we always say about modifications, get the right cover by declaring them – if you find the right insurer, you might not need to need to pay through the nose.

Get yourself sorted:

if you think the insurer is throwing out your claim unfairly on a technicality throw the ‘Versloot Dredging v HDI Gerling’ ruling at them.

More independent motorbike insurance advice

Keeping your insurance costs down
Are multi bike insurance policies cheaper?
The excess insurance trick that saves you serious money
Motorbike insurance mirroring explained
How do modifications affect bike insurance?
Treat saving on bike insurance like earning money


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The Author

Paul Vennard

Paul Vennard

Paul is actually a chartered accountant so he knows a thing or two about saving money - and that's one of his roles at Biker and Bike: how to save bikers money.

Like everyone else here he's a full-on biker. He's a year-round rider and never happier than when he's on a track, screaming the nuts of his 675 Daytona.

Paul also loves a trip. Just don't share a tent with him. He snores like a bastard.