Not being completely honest on an application for cheap car insurance to get a lower premium may not seem consequential, but someone has to pay.
When people lie or make errors on their insurance applications, it costs those who insure the vehicles billions of dollars yearly.
Misleading words can lead to lower prices, or what car insurance agents like to call premium leakage. Below are a few examples on what might be excluded or misrepresented on a car insurance application:
Who’s Utilizing The Vehicle
Value: $10.3 billion
The only people who are to utilize the vehicle should be listed on the car’s policy. However, according to Verisk, some individuals don’t add everyone to their vehicle insurance policies; 15% to be exact. One example could be a parent failing to put their teen driver on the policy. A study from Verisk shows that a large portion of insurance companies note that some parents take over a year to put their young drivers onto their policy.
Value: $5.4 billion
Some insurance companies offer a reduction in price for keeping miles low. Changes in circumstance, whether job or moving can affect how one estimates their mileage. Verisk reports that mileage is one of easiest things to fib on when it comes writing it out on your car application, especially when drivers have to report it themselves.
Insurance companies often give price breaks for low mileage.
Accidents And Infractions
Value: $3.4 billion
Not letting your insurance company know about violations or accidents might seem worth it, but they aren’t. Insurance companies have ways of finding out by looking up your record. When insurers don’t follow through with checking records enough, they lose out on money.
Cost: $2.8 billion
There are times when people give out their actual identity. Sometimes people put down a different persons driver license number to avoid higher payments.
What Happens When You Don’t Tell The Whole Truth
It is not in your best benefit to lie to insurance companies. It’s actually against the law! There are tools available for insurance agencies that will alert them of inaccuracies on an application.
Thinking you can pull the wool over an insurance company will not work best in your favor. If you get caught lying deliberately, the insurer has the right to deny you coverage.