Insurance premiums add up quickly, and it can be tempting to fib or omit information in the application process to lower your payments. Here’s what you should know before doing so:
An insurance policy is a contract between you and the provider. Even the smallest of lies can be labeled insurance fraud. Much like other contracts, when one party doesn’t honor their commitment, the other party has recourse to nullify the agreement or not deliver on their own commitments. Saving a couple hundred dollars on a policy might seem like a small win for your wallet, but it’s a gamble that could seriously cost you down the line.
What are the odds you'll be caught lying?
Claim adjusters employed by insurance companies investigate claims to determine whether and to what extent to cover damages. Adjusters are detailed and persistent. If one finds discrepancies between info you gave and how you’re using your vehicle, they have grounds to deny your claim, increase your premiums, or drop your policy. You might be required to retroactively pay for premiums. If the deception was severe enough, you could even be subject to civil insurance fraud charges.
It’s worth taking time up front to understand coverage options, compare them against your needs, and make the best honest decision on what to purchase within your budget. Areas where lies or omissions most commonly occur to the detriment of the insured party include:
Conversions and Aftermarket Alterations
A lot of drivers are customizing their ride with products that aren’t covered under standard auto policies. Additionally, camper conversions have become exceedingly popular, where it isn’t uncommon to spend thousands of dollars on significant electrical, performance, and appliance upgrades. This trend has accelerated with the economic changes of the Covid-19 pandemic.
Insurance providers have strict regulations on the standards a conversion must meet because there can be greater safety and financial risks, but they are evolving policies to accommodate growing market demands. While it might seem easiest not to tell an agent of existing or planned alterations to your vehicle, you’re taking an extreme risk with that approach. It is worth taking the time to document all work done to the vehicle, organize all receipts and invoices, and share this information with agents to ensure your policy will work for you when you need it.
Previous Accident or Ticketing History
This is something providers investigate before confirming policy and premiums, but it’s in your best interest to be honest from the start. You’re more likely to get an agent willing to work with you to find an affordable policy option.
Use of Vehicle for Work
Do you drive your car for work, personal errands, or both? Your provider needs to know. It’s especially important if you offer rideshare or delivery services, where strict rules apply as to who covers what based on whether the app is open, you’re transporting a rider, etc. It is true commercial add-ons or policies can increase your premium. That will depend on several factors such as your travel radius, type of vehicle, and profession. Openly discussing how you use your vehicle beats getting into an accident while on the job and finding out you aren’t properly covered.
Where the Car is Parked or Garaged
Some people file the vehicle’s main address somewhere other than where it’s most often parked to take advantage of lower cost coverage. Don’t do this. It’s not hard for insurance companies to figure out where the vehicle sits most of the time.
Claiming you’re the primary driver on your son’s car probably results in lower premiums. However, you’ll regret this if he ends up in a wreck. Note that it’s important to list anyone in your household on the policy if they’re of the capacity to drive. Anyone residing with you who won’t be driving your vehicle or is very unlikely to (such as a roommate with their own car) can often be listed as an excluded driver so as not to affect your premium.
Policy costs are somewhat priced based on mileage. As your annual mileage increases, so do your premiums. It makes sense; more time on the road brings more opportunity for things to go wrong. Going over the stated mileage by a couple thousand might not be cause for alarm. If you told the agent you drive fewer than 10,000 miles and your odometer reads 18,000 at the nine month mark, however, this could cause more trouble. You might just lose your low mileage discount, but your insurance provider could invalidate your policy if the discrepancy is suspiciously high.
Getting the Most out of Insurance
The last thing you want to hear after an accident that leads to injury or property damage is that you might not recover the funding you need because of discrepancies in your policy. Insurance payouts are difficult enough to work through without the added stress of a lie or omission coming back to haunt you. What you save up front won’t be worth what you pay later.
If you feel an insurance company is unfairly threatening to drop your policy or withhold payment based on nuances not stemming from your dishonesty or negligence, we can help. Vrana Law Firm is experienced in dealing with the common arguments used to get out of offering what you rightly deserve. We can fight for the recovery you deserve. You get a no charge, no obligation attorney consultation, and if we take your case, you only pay if we win.