The technical term for what your refering to is 'Transponder ring'.
The fault you have Shane is basically the transponder ring not detecting the transponder chip, which is built into the key; more than likely soldered to the pcb inside the key.
There is nothing you can do to rectify the fault. If you just do what JamesT5 suggested then that should sort your problem. It may not ever do it again but if it does then you'll need to take both keys and the car to the dealer to be reprogrammed.
A top tip is to leave the key in the ignition for a few seconds before turning to pos.3. I usually wait until all the lights have extinguished before i start mine, but that's me. Other people are in such a rush they usually just shove the key in the hole and turn it all the way to pos.3 instantly and try to start. It's these people i usually see at the side of the road that have a problem.
If you do read the car with DICE, the only fault that will show up is the one relating to the key not being recognised. It won't tell you anything else. So you won't acheive anything there.
Personally, i only have the car key in the ignition when i'm driving. I hate having a load of crap attached to the key ring bashing against my right knee, plus it looks a mess and wears out the ignition key and barrel prematurely. Having other car keys on the same bunch is a big no no too. The transponder chips in the other keys, in some cases, have been known to confuse the transponder ring and prevent the car from starting.
Oh, one more thing. Never ever spray lube oil into the ignition barrel. This is a sure fire way of damaging the transponder ring as it is wrapped around the barrel. Even Volvo will tell you that.
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