Insurance For People With Criminal Convictions

Life may be difficult and complicated enough if you have criminal convictions. To find that it might also prevent you obtaining the home insurance or the motor insurance you want may appear even more frustrating.

According to the the Ministry of Justice statistics of England and Wales in 2016 show that 1.46 million people were prosecuted at magistrates court for offences, with a conviction ratio of 85%. The number of defendants prosecuted for motoring offences has increased by 3% from 646,000 in 2015 to 667,000 in 2016, while the numbers of offenders convicted and sentenced have increased by 5%.

It is quite significant number and, rightly or wrongly, insurance companies take an individual’s criminal history into account when determining the risks and calculating the chances of their having to pay out on a claim. If those risks are determined to be too high, the insurer may reject an application for insurance out of hand, or charge an additional premium for extending the cover.

The website The Information Hub explains the legal obligations for disclosing convictions to potential insurance providers.

At the same time that insurance companies want to know about your history of past convictions, however, you also have rights under the Rehabilitation of Offenders Act 1974. What this law says is that after a certain period of time your conviction is regarded as “spent” and you no longer have the obligation to declare it – to an insurance company or to anyone else without direct authorisation.

Since these factors may end up tugging you in two apparently contradictory directions, the following main questions are raised:

what criminal convictions are actually concerned; and
after what period of time are any such convictions considered to be spent.

You may be surprised – alarmed even – that a criminal conviction is any conviction handed down by a court of law. In other words, it may be such a serious offence that a prison sentence was imposed or as relatively minor as a speeding conviction or a littering offence carrying nothing more than a fine.

Things are a little more complicated as far as the second question is concerned, since different convictions take longer than others before they are considered spent. To add to the confusion, the rules on such qualifying periods also change from time to time. The latest such reforms came into effect in March 2014. The national charity Unlock has an official calculator which you may use to find out how long it may be before your particular conviction is spent.

Material facts

It may be worth reiterating that you have a legal obligation to declare all material facts – such as convictions – to an insurer. This is true even if you are not specifically asked whether you have any convictions, you are still required to declare them if the insurer’s terms and conditions require it.

Indeed, the government backed Money Advice Service suggests that you ask your insurer for written confirmation of those convictions you have declared.

The reason is simple. If an insurer discovers that you have failed to mention a material fact it may amount to a fraudulent application for the cover and any insurance offered as a result becomes null and void.

A little background to this reasoning lies in the special nature of insurance contracts. They are based on a long-established principle of “absolute good faith” – “uberimae fideii” in the Latin – which calls for utter transparency and honesty on the part of insurer and insured. Failure to display that good faith in all your dealings with the insurer (or the insurer’s dealings with you) results in a breach of the contract and invalid insurance.

Why do convictions count?

To better understand some of the difficulties likely to be faced by people with criminal convictions getting insurance, it may be helpful to look more closely at just why insurers seem to think that convictions count.

It is a subject that the Association of British Insurers (ABI) certainly seems to appreciate gives many insurance customers and potential customers due reason for concern and a degree of difficulty. Therefore, it published in March 2014 a good practice guide entitled Insurers’ Approach to People with Convictions and Related Offences.

The guide is intended to help insurers and brokers ensure that their customers are treated fairly and in full possession of the facts concerning convictions and insurance. It urges ABI members to give customers full information about how their disclosure of previous convictions is used and to make sure that insurers ask clear and straightforward questions about convictions during the course of applications.

The guide also encourages any insurer unable to offer an applicant the cover they are seeking to help them find an alternative provider who may do so.

If the worst comes to the worst and a customer is found to have misrepresented their circumstances or failed to disclose a material fact, the guide asks insurers to treat those individuals with all due fairness.

Home insurance

In its outline of why previous convictions matter to insurers, the guide again makes the point that any form of cover is based on the insurer’s assessment of the risks involved – that is in the very nature of the business.

Nevertheless, with respect to any increased risks because of past convictions insurers are generally expected to take into account offences that appear to be relevant to the type of insurance. In the case of home insurance, for example, a conviction for arson may be an offence that any insurer is likely to take into account.

Similarly, a conviction for criminal damage or incidents involving dishonesty might also arouse an insurer’s doubts. If you or another member of your household has been declared bankrupt, you may also find it difficult to secure insurance cover.

In the case of cover for your home, the insurer is likely to take an interest not only in in any convictions you may have, but also other members of your household.

Motor insurance

When it comes to motor insurance, the convictions likely to be taken into account are – quite naturally enough – motoring offences.

This is an aspect of insurance that many customers may feel is especially onerous and not a little unfair. The subject is considered in somewhat more detail, therefore, in the following section.

Different types of convictions

The previous section mentioned that perhaps the most controversial area is motor insurance – one of the main reasons for this is that there are so many different types of motoring conviction. The range typically includes:

exceeding the speed limit;
careless driving;
driving without a licence;
driving without insurance – which is also likely to incur a driving ban;
drink driving – of which there nine different possible offences, all of which are also likely to incur a driving ban;
dangerous driving – which is also likely to incur a driving ban; and
causing death by dangerous driving – almost certain to incur a driving ban and may well also result in a prison sentence.

Although an insurer expects you to declare any relevant conviction – that is, one that has not been spent – the relevance of the conviction to the motor cover for which you have applied is related to the seriousness of the offence. Most insurers, for example, are likely to continue to offer you cover if you have a speeding conviction, but the same insurers may draw the line at anyone convicted of drink driving or dangerous driving.

One of the more common of the serious offences is drink driving – which here at GSI Insurance we estimate to involve some 80,000 drivers every year. Add to this the fact that approximately half a million breathalyser tests are conducted annually, and you may soon see why the difficulties of securing motor insurance when you have a criminal conviction affects so many people.

There are an estimated 38 million licensed drivers in the UK. The chances of a significant proportion of these picking up a serious driving conviction are high and the chances of them picking up a minor conviction are even higher.

In other words, it may be surprising to discover how widespread the problem of obtaining comprehensive, competitively priced motor insurance for many drivers.

What counts as a criminal conviction?

It has already been mentioned that criminal convictions are material facts as far as insurers are concerned. Determining what counts as a criminal conviction, therefore, is clearly important to know when you are applying for cover.

The government backed Money Advice Service makes clear that a criminal conviction may be anything handed down from the courts by way of a penalty that might range from a fine up to a prison sentence. You might also take into account, however, that police cautions – which are administered as a result of your admitting guilt to a crime – are also criminal convictions.

In other words, a criminal conviction results from your having broken the law and that fact may be by way of your admission of guilt or your guilt may be determined by a court of law.

Criminal records

Although a criminal record includes a list of any criminal convictions you may have, it goes considerably further in describing every contact you may have had with the police.

Simply being questioned by the police about a potential crime, in other words, does not amount to a criminal conviction. Criminal records are held on the Police National Computer (PNC), although local police forces may also keep their own criminal records which include both convictions and non-conviction details.

Your obligation to disclose material facts to any potential insurer is limited to criminal convictions, therefore, and technically speaking does not extend to disclose of your detailed criminal record.

Although any conviction by a court of law – whether or not a penalty is imposed by way of a fine or imprisonment – remains part of your criminal record. However, the need to disclose the conviction lapses after a certain period of time, when it is said to have been “spent” – a concept examined in more detail in the following section.

When is a conviction spent?

The concept of a conviction becoming spent over time is a central principle of the Rehabilitation of Offenders Act, 1974. Just as the title suggests, this exists for the rehabilitation of people convicted of a crime but who have paid their penalty and may effectively therefore be treated as though they have never been convicted of or sentenced for that offence. For the purpose of rehabilitation, therefore, the conviction is regarded as having been spent.

The Act – and its amendments, the most recent of which came into effect in March 2014 – specify the periods of time required before each conviction may be considered as having been spent and is available for all conviction and cautions except those for which the penalty was a period of imprisonment longer than four years and all public protection sentences (principally sex offenders). Rehabilitation – the period after which the conviction is considered to have been spent – varies according to the penalty that was imposed and not the crime itself.

How long?

The fact is that the Rehabilitation of Offenders Act is very complicated and it may prove very difficult working out just when any conviction you may have is spent.

The problem is made still more complex because of the rules specifically relating to motoring offences. In guidance reproduced on the official government website, for instance, it is explained that:

an endorsement imposed either by way of a fixed penalty notice (FPN) or by a court in pursuance of the Road Traffic Offenders Act 1988 is treated as a conviction;
this type of conviction becomes spent after 5 years (or if the offender was under 18 years of age at the time of conviction, after two and a half years);
both penalty points on a licence and any driving disqualification imposed by a court are regarded as spent when the cease to have effect (the effect of penalty points lasts for three years, for example, as set out in the relevant legislation) and
if a court imposes a penalty or sentence for more than one offence, the one with the longest rehabilitation period is the one that establishes when the conviction is spent.

In order to help guide motorists in particular through the maze that is the Rehabilitation of Offenders Act, the charity for people with convictions, Unlock, publishes a number of guides including a useful online calculator which may be used to establish when a particular criminal conviction is regarded as spent.

It is important to remember that, an answer to any questions from a potential or existing insurer, you do not have to disclose any convictions which are spent.

Is it fair?

When the latest amendments to the Rehabilitation of Offenders Act were introduced in March 2014, there were renewed complaints from some quarters about the reliance placed by insurers on customers’ history of criminal convictions and the conditions regarding disclose.

In a story published in March 2014, for example, a correspondent in the Telegraph newspaper pointed to the fact that an FPN or other endorsement imposed by a court lasts for five years before the driver’s slate may be wiped clean – five years, that is, before the relevant (principally minor) motoring offence no longer needs to be disclosed to an insurer.

By way of contrast, however, the Telegraph summarised the apparently far more lenient treatment given by the 2014 amendments of those convicted of offences other than motoring offences:

if you have been fined for any offence other than a motoring offence, it is now spent after one year (it was previously five years);
if you have been sentenced to prison for up to 6 months, the conviction is spent after two years (down from the previous seven years); and
if your prison sentence was between six months and 30 months, the conviction is now spent after four years (down from the previous ten years).

The correspondent argued that motorists – who have five years before their minor convictions are spent – appeared to have been treated less fairly than common criminals.

Summary

When you apply for insurance, you have a legal obligation to disclose all material facts whether the proposal form actually asks for them or not. Material facts include your disclosure of any criminal convictions you may have.

Convictions are relevant because insurers consider them to be an indicator of your likely risk – and the possibility, therefore, of their having to pay out on a claim. As a result, therefore, in response to a customer’s disclosure of criminal convictions an insurer may:

reject the application for insurance cover out of hand;
extend cover, but only on payment of an additional premium; or
attach particular conditions to the cover.

Although insurers take convictions into account, they typically consider those most relevant to the cover being sought and to the seriousness of the offence involved. Applicants for home insurance, for instance, may face difficulties if they or a member of their household has been previously convicted of arson, dishonesty or been declared bankrupt; whilst motoring convictions are likely to be taken into account by those seeking motor insurance.

The area of greatest controversy appears to be the obstacles placed by many insurers in the way of those with motoring convictions.

The good news, however, is that here at GSI Insurance we have a particular expertise and experience is arranging schemes to accommodate those drivers with motoring convictions including those who have been given penalties for drink driving.

The situation regarding past criminal convictions and the need to disclose them is made somewhat more complicated by the fact that each conviction becomes spent after a particular period of time. The complexity stems from the Rehabilitation of Offenders Act of 1974 and its subsequent amendments, the latest of which came into force in March 2014.

You may refer to the law itself, of course, or use an online calculator to help you work out when the penalty for any offence you may have committed is regarded as spent.

Resources

As may be apparent, therefore, the whole question of insurance for people with criminal convictions is complicated to say the least. Although no suggested reading list is likely to offer exhaustive coverage of the subject, you may find some of the following resources to be helpful:

The Money Advice Service was set up by government and offers free and impartial advice on financial matters including a resource entitled “Getting insurance if you have a criminal conviction”;
The charity for people with convictions, Unlock, has an extensive knowledge database, including many pages relating to applications for insurance, requirements for disclosure and the period of time required before a conviction is regarded as spent (for which the website includes a helpful calculator);
The mental illness charity Rethink has also published an extensive guide entitled “Criminal Convictions – How and When to Tell Others”;
Although it is written with the particular interests of insurers in mind – for whom it promotes a code of good practice – the 35-page manual “Insurers’ Approach to People with Convictions and Related Offences”, published by the Association of British Insurers (ABI), makes especially detailed reading;
The Rehabilitation of Offenders Act 1974 is a whole field of study in itself, but the government’s own 16-page guidance on the implementation of the amendments made to the Act in March 2014 is likely to be one of the most authoritative sources on the concept of spent convictions.
In Brief website offers further reading and free legal information on a range of topics including an overview of criminal records, the Rehabilitation of Offenders Act and the principles of spent convictions.

Disclaimer: The contents of this guide should be used for reference only and not as legal advice. It is written based on our understanding of current legislation which may be liable to change.

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