19 November 2012

Admiral start loading premiums for speed awareness courses

Admiral Group have started treating attendance at a speed awareness course as if you have a speeding conviction but do you have to tell them?

The BBC's 5 live Investigates programme reported that Admiral insurance and it's sister company Elephant, have started to load insurance premiums for motorists who attend speed awareness courses.

Speed awareness courses are currently taken by around 750,000 people each year as an alternative to a speeding conviction. They typically cost £60-£100 and last for 2-4 hours but save the driver from points on their licence and having to report a speeding offence to the insurance companies.

Admiral Group have started to argue that, because you only go on a speed awareness course if you have been caught speeding, they will treat it in the same way that they would handle an ordinary speeding offence.

The increases have caught the police and training companies out who, in their literature promote speed awareness courses as allowing you keep your current insurance premium.

The police say that independent research has shown speed awareness courses to be more effective at changing motorists behaviour than getting a speeding conviction and points on their licence. Removing the benefit of escaping increased insurance premiums may reduce the number of drivers taking up the speed awareness courses thereby reducing road safety.

Do you have to tell your insurer about a speed awareness course?

Only if they directly ask you about it. You don't have to volunteer the information but insurance companies are entitled to ask you for any** piece of information they think may have an impact on the likeliness of a claim. If you deliberately mislead or fail to disclose something they have asked for, you can expect trouble if you ever need to claim. You could then be liable for all costs and potentially be prosecuted for driving without insurance.

With the ability to differentiate (or discriminate) by gender about to disappear on 21st December, insurance companies are forced to use other data to estimate risk. In the absence of another piece of data that does accurately reflect risk, reliance on the existing known factors increases and therefore so do the premium differences.

One of the contributors to the 5 live Investigates programme raised another issue however. Admiral have obviously used the same space on their database to record speed awareness courses as actual convictions. This data is being passed to other insurers as the contributor found when other insurance companies refused to quote him on the basis that he had a conviction code on file which they didn't understand.

Admiral may not be the last insurer to require knowledge of speed awareness courses but if enough otherwise good risks start to avoid them, they may find it was a poor business decision. You have every right not to use an insurer whose questions or actions you don't like. Find cheap car insurance quotations with MoneyMaxim.

**It's not quite any piece of information, they can't discriminate on the grounds of race, religion on sexual orientation or from 21st December, gender.