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How lying to your auto insurer can hurt you

Getting discounts on your standard auto insurance makes good cents! But it can be trouble, if you are too aggressive fudging the facts or miss representing your record.

Not updating your address

Most people that move to a higher crime urban area have a good idea their claims will increase. So they may forget to update their parked address. Or they claim the car is garaged when they have no access to one. If your car it not kept where you claim it would be when you purchased the policy (and what your premiums were based on), your claim could be legally denied.

Forgetting tickets and accidents

Frequently drivers "forget" about tickets and accidents to the car insurance company. Insurers check your drivers license on renewal and when you get a new policy. So you might get away with a ticket for awhile, but in 6-12 months, the carrier will probably surcharge you.

Carriers also check various databases like the Comprehensive Loss Underwriting Exchange that gives them the dollar amount, type of claim, date of claim, name of driver, and name of policyholder in an accident.

Not reporting all the drivers in the household

A good % of drivers in the household are not are not listed on car insurance policy. The omitted driver is often a high risk beginning driver or an older driver with tickets and accidents. If the "forgotten" driver gets in a car accident,he car insurance company will raise your premium, cancel your policy, or force you to exclude the higher risk driver from the policy.

Omitting business use

Some policyholders don't tell their auto insurers they're using the car for business purposes. Business auto insurance covers most legal vehicle activities. If they get in an accident during a clearly business outing, under a personal auto policy, the car insurer may not pay.

Classifying your vehicle as agricultural

When you take a vehicle especially high performance and tell the insurance company it is for farming, you may get a discount, but your policy is dependent on the info you provided to the insurer as true, and the policy may be void if the information is incorrect.

I'm different because I believe many people are OVERinsured. Don't just drop coverage, look at the parts of an are youautop policy you are not using. Like car rental, if you have a car you can borrow. Drivers who used our service get multiple rates, save money and get better coverage. There over 100 car insurance companies, so don't try and determine the discounts for every carrier on your own. For low auto insurance rates, choose your state to the right.

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Omitting car modifications

Car modifications may void a new car warranty, especially on the engine, exhaust, electrical or suspension systems. Some changes could be illegal or cause an accident. Bottom line is, failing to notify your insurance carrier about car modifications may result in non-payment of a claim if logged. Insurance providers usually find this information after sending out an expert to access car and property damages or via other sources.

Driving with a suspended or cancelled driver's licence

If you're license has been suspended or revoked, your car insurance policy soon also. Insurance companies tell you in the policy that you agree to notify them with any changes in circumstances, which include traffic tickets or accidents. If you continue to drive outside your license, your insurance policy is likely to be void and the insurance company will refuse to compensate any claims you make.

Giving the insurer the wrong mileage

Many people will under report their mileage to get a lower rate. Until they are in an accident and the adjuster compares the last reported mileage to the one you gave the insurer. Of the insurer may be able to compare odometer readings taken at smog testing stations to what you tell them.

Lying about your driving record

Most insurance companies check your State's DMV database to verify the info they receive from you. Some of these checks are carried out when a claim is logged. If your insurance company determined that you provided false information either initially or when logging a claim, they may cancel your policy and refuse to honour your claims.

Summary: Every company varies on how they spend validating info given them. If you are in an accident and the insurer discovers a misrepresentation, the car insurance company might deny the claim. Make sure your info is up to date and truthful, so you are covered. Nothing worse than paying for premiums only to have your claim refused.

Written by Craig J. Casey

Financial Writer helping people with their insurance problems on the net since 1998.

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