- If you lie to your policy provider, you could be denied coverage, quoted higher rates, or face penalties like fines, community service, or even prison .
- It does n’t matter whether you lied intentionally or gave incorrect information to your indemnity company by mistake — insurers can inactive deny coverage and could pursue other penalties .
- Making a fake car insurance claim is an exemplar of hard fraud and is a felony, while it ‘s considered soft fraud when a policyholder misrepresents personal details .
fix to shop cable car policy ? Start calculator
What happens if you lie to your policy company ?
At the very least, the monetary value of getting car indemnity could get more expensive if you lie to your indemnity provider. Once insurers discover that you ‘ve misrepresented yourself when applying for coverage, they ‘ll adjust your policy. You ‘ll pay higher premiums in the future, while besides being responsible for paying old payments in full. Some policyholders who lie to their indemnity companies could see evening more serious consequences than higher costs of coverage. Insurers may deny coverage after a claim if they discover that the information you provided was wrong. Since lying on an policy application is a form of imposter, you could besides face civil punishments, like fines, community service, and even imprison time, depending on whether your insurance company presses charges. not every applicant who gives fake data means to lie to their policy company, but insurers wo n’t distinguish between a dwell and an honest error if they discover the truth. If you find out you ‘ve made a error on your application, you should contact your insurance company ASAP. While you may see higher premiums once the insurance company adjusts your rates to align with your update information, you ‘re besides more likely to avoid harsh punishment .
What are the types of car insurance fraud ?
The two types of car insurance fraud — hard and soft imposter — solution in an estimate passing of $ 40 billion a year, according to the FBI [ 1 ]. Hard imposter is less common than indulgent, and typically involves making a faithlessly claim in holy order to collect a payout. On the other hand, balmy fraud refers to when drivers lie to their policy supplier about the sum of damage when they make a claim, or about personal details while applying for coverage. No matter the type of car indemnity fraud, lying to an policy ship’s company is illegal. → Read more about the forms of car policy imposter
4 common ways drivers lie to indemnity companies
There are a act of ways drivers can falsify their personal details to get lower costs on car insurance. They may lie about :
- Number of claims on their criminal record
- Number of drivers in the family
- How frequently the cover vehicle is driven
- Where the car is kept
The easiest way for drivers to get brassy car policy is to compare quotes online from multiple providers in their area. ( hot tip : Our accredited policy agents at Policygenius can do all the ferment for you ! ) While rates can be high for young drivers or people who ’ ve been in an accident before, they ’ ll influence to find the cheapest indemnity coverage you qualify for. ready to shop car policy ? Start calculator
Number of past accidents
Drivers who ’ ve been involved in a previous car accident much pay more for car insurance than those who ’ ve never been in a crash. While it may be tempting to lie to a fresh insurance supplier about your drive record, there ‘s a estimable gamble they ‘ll discover the truth. indemnity companies will check your drive record after you submit an application for coverage. If they uncover any accidents, violations, or claims that you did n’t disclose, you could receive higher rates or lose coverage wholly .
Number of drivers in the family
just as drivers with a anterior crash on their records pay more for insurance than those with clean records, car insurance for adolescent drivers is more expensive than for older drivers. While premiums typically decrease as you get older, rates can remain high until you ’ re in your 20s. Because of this, an applicant may lie to their indemnity ship’s company about the age of drivers in the family. They could besides lie about who operates an see vehicle by not listing a adolescent as a car ‘s primary driver. In any case, if person who lives in the family is involved in an accident and has to make a title, car owners could have trouble getting damages covered. They may alternatively be forced to pay for repair themselves. → Read about how to exclude bad drivers from a vehicle ‘s coverage
How frequently the car is used
The more a vehicle is used, the more likely it is to be involved in a crash over a long period of clock. As a leave, it costs more to insure a car that ‘s used for your day by day work commute than it does for one that ‘s kept in a garage for weeks at a time. similarly, policy companies frequently ask how a cable car is used — whether it ‘s used for business, personal consumption, or recreationally. Your answer to this question can besides affect your price of car indemnity, as it ‘s tied to the total your vehicle is used and the type of damage it could encounter. While you could claim that you drive fewer miles in order to qualify for a lower rate or a low-mileage agio discount, lying to your policy provider about how much your car is used could result in coverage being denied in the event of damages .
Where the car is kept
Because drivers normally keep their cars at their homes, their cable car ‘s garage will match their address. however, occasionally a policyholder will keep their car at a separate location. This merely becomes a trouble if you claim on your application that the car is kept at a different placement than it actually is in order to save money. For exemplify, a driver live in a express where policy is expensive, like Michigan or New York, could claim their car is garaged and driven in a less expensive state that ‘s nearby, like Ohio or Pennsylvania. If you have to make a claim after an accident, the policy company will ask you where you were driving. If you were driving to work or to pick up a syndicate penis, they ‘ll quickly figure out that your car is actually garaged in a place that ‘s different from what you claimed — and you could face consequences .
Frequently asked questions
How far back into your claims history do insurance companies look?
typically, indemnity companies look three to five years into your past to set your rates. As clock time passes, costs will decrease steadily — provided you stay accident-free.
Do you have to tell insurance companies about tickets?
No, because indemnity companies can access reports on your driving history themselves to reveal past tickets. If you get a slate for speeding or another rape, your insurance company will find out when they pull your report at the fourth dimension of refilling — and likely raise your rates to match the increased risk. If you ‘re a new applicant, lying about a ticket to your indemnity company runs the risk of making you ineligible for coverage, equitable as other lies would .
What happens if you file a false claim about an accident?
Filing a assumed claim is a form of indemnity imposter. Policyholders who make imposter claims could face serious legal consequences if they ‘re found out, possibly including imprison fourth dimension. Exaggerating a claim after an accident or lying to an policy adjuster to receive a higher payout is besides fraud .