Seven million warned of insurance trap

This was the title of a report in “The Metro” Newspaper on Wednesday, October 14, 2009 by reporter Aidan Radnedge.

According to his report the loophole in the regulations means that millions could be paying for worthless insurance.

The Metro article says” Millions of people could be paying for worthless home insurance because of a loophole over past convictions, it was claimed yesterday.
Anyone with a minor offence or a police caution against their name could invalidate their cover if they do not tell their insurers about them.

The condition can apply to anyone else in the family or friends staying in the property. It can also affect landlords who may find their policies are worthless if their tenants have convictions they have not disclosed.

The situation came to light when one major insurer demanded a customer give back the £241,000 pay-out she received after her home was burned down in an arson attack.
Michelle Barber, who was caught out for failing to declare a £150 fine for a benefits offence, said: 'I was shocked and felt sick. Why did no one tell me such a tiny fine could do this?'

Her Barnsley home was burned down by her husband, Gary Hooley, following a row at a friend's 50th birthday party in February 2007. Hooley, who had not wanted her to keep the detached bungalow in any divorce settlement, was jailed for four years.

But, two weeks before mother-of-two Ms Barber was due to move back in, her insurer, Aviva, found out about her 2002 benefits infringement.

The 51-year-old said: 'I wasn't arrested, the police weren't involved and I'd simply forgotten about it by the time I took out the insurance.'

Yesterday, Aviva was 'standing by' its actions, saying: 'Had she disclosed her previous fraud conviction, we would not have offered her cover.'

One in five of the working population - or about 7.3million people - has a conviction or caution.
Offenders support group Unlock accused insurers of failing to ask clear questions or explain the risks of not declaring convictions.

Spokesman Chris Bath added: 'You are going to have to declare your past and you also have to declare the past of those living with you under your roof.'

One of the insurance brokers the online insurance advertising service jml-insurance.co.uk has spoken to about this situation says” Criminal convictions can make it very hard for people to get insured, but the question is not always asked by the insurers or other quotation houses. We ask the question and help people who have convictions to get insured properly.”

To find out more visit Insurance for ex offenders at: http://www.jml-insurance.co.uk/types.php?id=83&sec=16