If your car insurance company does not feel entirely happy in paying a claim, they may downsize or even refuse to pay the claim amount filed with them.
For example, if your claim is regarding a vehicle, or property within a vehicle, being stolen and the insurers have reason to believe that you were at fault (for example by leaving the car unlocked overnight), you may struggle to successfully get a payout from them.
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This is where making sure all details given during the application stage pays off. If the insurer believes that your claim is being made as a result of the car being used or kept in a way not declared in the application (such as using your car for business purposes whilst only claiming domestic cover), they may reject the claim - this is why lying on your application in order to obtain cheaper car insurance can be a false economy.
This also applies to the claim itself; do not be tempted to lie about what happened in order to claim a little more out of the company - but this works both ways. Make sure you can prove ownership of anything that may be stolen from the vehicle, as if you cannot prove you owned that iPod or expensive laptop, your insurer is far less likely to pay for it.
If you drive a classic car and do not have an agreed value set with your insurer, you may lose money as the company may simply consider the market value of the vehicle itself, not its worth as a restoration project.
As discussed previously, all policies are held in “utmost good faith”, meaning that it is your responsibility to make sure that all information your car insurance has on you and your vehicle is correct and up-to-date, and that you inform them of any changes that may be important without being prompted. Insurance companies assume all information on file is true, and will only investigate in the event of a claim.
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