A spokesman for the Association of British Insurers, Malcolm Tarling, said: “We don’t see it as a ‘get out’ clause. Insurers feel justified at taking someone’s driving record into account for five years, because their own research reveals that someone with penalties is more likely to subsequently reoffend.”
So what has changed, and how will it affect you when buying insurance, applying for a mortgage or opening a bank account?
Changes to the Rehabilitation of Offenders Act
If you have any kind of conviction, you have to disclose it when applying for a job, renting or buying a home, or applying for insurance, a credit card or bank account.
After the lapse of a certain period, however, these are deemed “spent”; you are considered rehabilitated, and need no longer confess your offences. The length of time between conviction and rehabilitation was slashed on Monday.
For example, if you had previously received a fine for any kind of offence, you were required to disclose it for five years. That has now been cut to a year. If you were given a prison sentence of up to six months, you used to have to volunteer your record for seven years. That has now been reduced to two years.
Where your sentence was between six and 30 months, you were required to confess this for up to 10 years. That has dropped to four years.
These reductions will cut the time that offenders are discriminated against for most times of financial services – except motor insurance.
While life became a great deal easier for many offenders, there was no change for motorists, as endorsements and penalty points have been expressly excluded from the new, more lenient regime.
Penalty points stay on your licence for three years. After four years you can apply to have them removed. But you have to declare them when applying for motor cover for five years, and they can have a significant impact on your premiums.
A 40 year old with one speeding conviction and three points, who drives a Ford Mondeo, will pay 10pc more, according to the AA, with the cheapest policy at £332. The driver must continue to disclose this conviction for five years.
The driver must continue to disclose this conviction for five years. With a careless driving conviction and six points, half the AA’s panel refused to quote at all, and of those that did, premiums leapt by up to a third. The driver would have to declare the offence for five years.
But the new system is rife with inconsistencies. For example, if someone was jailed for up to six months for careless driving after a serious incident, but did not have his or her licence endorsed, the conviction would be “spent” after two years, which means it would not have to be disclosed for two years after release.
Even then, the public should be vigilant, as there is nothing in law to stop an insurer asking an open question about all past convictions. However, where an offence is spent, there is no requirement for a consumer to disclose it.
From summer, the motor insurance industry will join with the DVLA and the Motor Insurance Bureau to launch Mylicence, an online tool giving them access to all “unspent” driving convictions.
Any kind of offence can push the cost of home insurance up by at least 20pc, according to Bureau Insurance Services, but it is still possible to get cover.
Nicky Smith, general manager for Bureau Insurance Services, which specialises in difficult-to-place cover, said: “Mainstream insurers will not look at anyone with unspent convictions, but we have people on our books who have been convicted of all sorts, from cannabis possession right up to murder.”
With household insurance, any conviction associated with theft, such as handling stolen goods, will be particularly frowned upon.
Ms Smith added: “Any kind of financial crime or irregularity is particularly difficult. Insurers also do not like any kind of sexual offence, because of what they deem the moral hazard.”
However, these no longer need stain your reputation for such a long time, and reducing the “unspent” period will cut premiums.
Ms Smith said: “Reducing the timescale by which these have to be disclosed will make many individuals’ lives much easier.”
Most mortgage brokers will ask applicants whether they have ever had a criminal conviction; however, if these are spent, there is no legal requirement to disclose them.
David Hollingworth of London & Country said: “We do ask a general question, but it would not always bar you from getting a mortgage. Cases are judged individually. But it would be fair to say that any kind of financial irregularity or fraud would make it very hard to get a loan.”
According to Ray Boulger, of brokers John Charcol, about 90pc of lenders ask about convictions, but smaller building societies may not be interested.
He said: “The best chance is likely to be with one of the smaller lenders who underwrite manually. Even then it will depend on things like the type of offence, whether it was a one-off, plus the other usual factors, such as the size of the deposit.
“A lender might look more favourably on a joint application, assuming only one party has a criminal record, than on an application in the sole name.”
A criminal record would not necessarily bar you from a bank account, according to the British Bankers’ Association. However, any hint of financial fraud would be a major hurdle to applications for credit.
An HSBC spokesman said: “We consult the national fraud register run by Cifas, which is a database of fraud convictions. Where this shows a mark against someone’s name, we would proceed with extreme caution.”
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Source : http://www.telegraph.co.uk/finance/personalfinance/insurance/motorinsurance/10695665/Criminals-get-better-insurance-but-not-speeding-motorists.html1067