Consequences of Lying to Your Car Insurance Company
Telling lies is not a good thing to do. It is immoral, wrong, and deceitful. But when it comes to lying to your auto insurance company, not only it could be wrong, and expensive, but also could lead to you facing criminal charges and possibly some jail time as well.
Auto insurance is mandatory in almost every state in the US. When there is a law for something, lying about it would not be a great thing to do. But of course, there are different ways in which one can lie to the auto insurance company. Some are wrong, some are serious, and some are straight-up felonies. In this article, we’ll look at all the different types of lies you need to avoid telling your car insurance company and why.
Not Disclosing the Drivers in Your Family
One of the most common things people do is not tell the insurance company how many people are potentially going to use their car in their family. Technically it is not lying, as some people avoid disclosing it while others do not consider it a big deal, but it is a big deal to the insurance company.
For example, auto insurance companies understand that sometimes you might lend your car to a friend or someone else, and they might get in an accident. Making an insurance claim in such situations is perfectly fine by the car insurance company.
But if 0ne of your family members crashed the car and they are not added as registered drivers in your policy, then your claim can be rejected, and you might also be dropped for not disclosing the truth. Family members will most likely drive your car regularly. This is why auto insurance companies require you to add them as registered drivers if they are going to use your car regularly.
How Much You Drive
Telling your insurance company that you do not drive your car too much but in reality, you do long commutes every day can lead you to trouble. Since these companies require how much you drive to assess the risk of you getting in an accident and calculate the price of your policy, if they find out you’ve been driving more than what you claimed, your insurance rates would shoot up, along with insurance premium rates.
So tell the insurance company exactly how much you intend to drive if they ask, and do not withhold facts. You might ruin your chance of ever getting affordable insurance rates if you are caught lying.
Lying About Parking Location
The rates for a comprehensive insurance policy (parked car insurance) depend majorly on your parking location. If the place where you keep your car has a higher risk of accidents, theft, etc, you’ll be charged more for comprehensive coverage. Different areas have different rates for this policy.
So here’s what many people do; they lie about the area they park their car. Instead of their original parking spot, they show that their car is parked in one of the “safer” places, which results in lower rates for comprehensive insurance. But since their car is parked in areas that are not so safe, some accidents will occur and they’ll need to make an insurance claim.
This is when the trouble begins. The insurance company will find out about the discrepancies in the parking locations. And if you are caught lying, not only your entire claim will be rejected, you will be dropped from the policy. There have been cases when people have been sent to prison for doing things like this.
Lying to your auto insurance company is considered insurance fraud and it is a felony in the US. Take the case of the santa ana car insurance case where a woman was nabbed by the police for committing insurance fraud. It is a serious felony and not worth saving a couple of hundred dollars in insurance expenditure.
Lying About Past Insurance Claims
Your past insurance claims will increase your current insurance rates. This is because the insurance company will now consider you as a high-risk individual who is more likely to be in a car accident. Hence to offset the risk, you have to pay more for insurance premiums. So, it’s important to choose best car insurance company always.
So to avoid this extra payment, many people lie about past insurance claims. While insurance companies are extra vigilant when it comes to these things, some might not bother to look at your insurance history. That’s even worse because the moment you make an insurance claim, i.e., you need the insurance amount for which you were paying the insurance premiums, it will be rejected.
The insurance company is in full legal bounds when they reject your claim if you lied to them about the details. Not only rejected, but they will most definitely drop you from the policy, even barring you from getting a policy from them. You’d be lucky if they do not take the “insurance fraud” route.
The reason why insurance companies have this right is when you buy their policies, you agree to their terms and conditions. That long page of words that you willingly sign contains important conditions that say they can reject your claim, and even drop you from the policy if the information given by you is false.
The consequences of lying to your insurance company can range from bad to worse. Even the lightest consequences would mean you do not get the insurance money when you need it and for what you’ve been paying those insurance premiums for. And not getting your insurance money is the best that can happen if you are caught lying. People can go to prison for insurance fraud in the worst-case scenario. So avoid lying, pay a little bit extra but stay secure.