Why You Should Never Lie on Insurance Applications

Most people are aware that things like the number of traffic violations received and past DUIs will effect your insurance rates, so it’s not surprising that some drivers are tempted to lie about their driving details or past history when they are applying for a new insurance policy. However, this is a very bad idea.

Why Not Lie?

The answer is pretty simple. If an insurance company finds out that you were lying when supplying information for a policy, this would be considered to be misrepresentation or non-disclosure.

In such situations, the insurance provider is legally able to declare the policy void (which is what actually happens in most cases). That means that the policy is cancelled immediately and the policyholder becomes completely liable for any future payouts resulted by an accident.

Of course, driving without the state minimum coverage is illegal, so in order to continue to drive legally you would have to get new insurance. Unfortunately, as you apply for new policies, you will discover that your record now has a non-disclosure cancellation on it. This will stay on your record for three years and it will also tag you as a high risk client, resulting in extremely high premiums. Of course, this is if you can even find companies that will accept you as a client. Many popular insurance providers prefer to avoid these kinds of clients altogether and will refuse to offer you any kind of policy.

Can’t I Tell a Small Lie?

The lies do not even have to be that big. One of the most common lies is about where the car is parked at night. Someone who keeps the car in a garage will get a better premium than someone who parks on the street. This might seem like a small, innocent lie that can save some money, but the insurance company will discover the truth should the car ever be vandalized, damaged or even stolen while it is parked outside at night. In such a situation, the company will refuse to pay for any claims and might even cancel the policy.

Worse Case Scenario

Depending on how serious your lies were and how far the insurance company is willing to go, you can expect to be fined up to $100,000 for a first offense and $200,000 for subsequent ones. If the company considers you to be guilty of fraud, they might even take you to court. If you are found guilty, you can even face up to 10 years in jail. That is why it is best to be as truthful as possible whenever you are dealing with your car insurance.

Ways to Lower Your Insurance Without Lying

Many drivers just feel that car insurance premiums are too expensive, but often this is due to the fact that they have expensive policies that include a lot of services, so it is only normal that their policy would come with higher premiums.

This can be easily fixed by revisiting your policy and trimming down items you feel comfortable doing without.

Another clever way to get your rates down is to find a competing company that is willing to give you a better rate. If you compare quotes from a few insurance providers, one of them is sure to offer you a rate you will be happier with.