Auto Insurance Applications One Third Lie

What Happens If You Lie When You Buy Insurance

Why Lying or Omitting Facts Can Cost You Money

Insurance companies ask a lot of questions when you apply for insurance. Sometimes the questions seem too personal, or even annoying, and make you wonder why you have to answer them. Other times, you don’t hesitate to answer because the questions can lead to discounts or price reductions.

Your answers determine the price you pay for your insurance, so it makes sense that you want to be in the best position to get as many discounts as possible. But what happens when the questions make you think you might pay more? Can you lie when vendors ask insurance questions?
Is It Okay to Lie to Insurance Companies to Get a Better Rate?

Does it make a difference if you exaggerate just a little, withhold information, or just flat out lie to an insurance company? It’s difficult to understand the consequences of lying to insurance companies unless you’ve been caught in a lie. But, by then, it’s too late.

Here are details on:

• The different reasons people lie to insurance
• Little white lies and misrepresentations people make to insurance companies
• What the consequences are
• Legal ways you can save money on insurance without lying

Although the reasons a person may not provide accurate information may vary from making an honest mistake to a flat out misrepresentation or lie, the consequences of lying on an insurance application, or lying to an insurance company during a claim, can be serious.

5 Common Home Insurance Lies and Misrepresentations

1. Whether you have a fireplace or wood stove: Because of the increased risk of fire, additional costs can apply to an insurance policy when a person has auxiliary heating like a wood-burning stove. People sometimes “forget” to tell their insurance, though insurance agents or representatives will ask the question. If you lie about this and have a fire or other damage caused by the wood stove, the insurance company may not pay your claim.
2. If you have a dangerous dog or dog breed: Lying about whether you have a dog because you are afraid you won’t get insured is going to be a problem for you if you have a claim. Withholding the information from an insurance company or making a false declaration could result in the insurance contract being canceled or considered null and void.
3. If you have a pool or a trampoline: Pools and trampolines increase liability risks and can be an issue for some home insurers. It is best to declare this information because you may even need to add extra coverage to the policy to protect you in case of an accident or claim. If you lie, the insurance company could deny your claim even if it has nothing to do with the pool or trampoline. It’s better to start a policy with a company that is willing to insure you in the first place.
4. Doing renovations or not doing repairs: If your insurance company asks you questions about dates of renovation or requests that you do repairs, be honest with your answers. You should also contact your insurer any time you do renovations in your home to make sure your home insurance is enough to cover you properly. If it is basic renovations, it’s not typically a problem. However, the insurance may not pay if you don’t declare renovations and have a claim during the project.
5. Use of the home: A home insurance policy is designed to insure your primary residence being used for your own personal use. Any deviation from that may break your insurance contract terms and conditions. Home vacancy, renting to others, business use, home-sharing like Airbnb, or any situation where your home is not being used as a private residence for you and your family can create an issue with a home insurance policy. There are endorsements, vacancy permits, and other coverage that can be added to a policy to make sure you stay insured in these circumstances.

An insurance representative is there to help you figure out solutions, so be honest and discuss your situation. Sometimes a different kind of policy will have to be issued. However, telling the truth about the use and occupation of your home will make sure your insurance covers you in a claim.

5 Common Car Insurance Lies People Tell

1. Vehicle condition: Not revealing per-existing damage on vehicles, failing to report modified cars or upgraded equipment.
   Drivers of the car: You should never misrepresent who the drivers are in the household and who really drives the car as the primary driver. If the truthful situations aren’t declared, a claim may not be paid because the insurer may say they wouldn’t have accepted the risk or written the contract had they known.
2. Use of the vehicle: Not revealing the true distance to work, hiding business use like delivery, or concealing whether the car is kept at your address or a separate parking garage at night can affect the rate of insurance. The information must be kept accurate in order for your policy contract to pay out properly in a claim.
3. Lapse in coverage: The insurance company needs to know if you have been uninsured for a while, had a lapse of insurance or had a policy canceled for non-payment or other reasons.
4. Traffic violations: You might not tell the truth about previous tickets, penalty points on a driver’s license, DUI, or accidents to avoid insurance surcharges. But this kind of information will usually surface. You are better off being honest and trying to negotiate the best rate up front.

Why Do People Lie to Insurance Companies?

Although people may lie about any number of things for their own reasons, inevitably the reasons usually lead to some sort of financial gain. Here are three common reasons a person might lie to an insurance company:

• Trying to save money on insurance premiums: If money is so tight that saving a few dollars on your insurance is worth lying about, imagine the financial distress you will be in if your claim is denied. Not only can the insurance company refuse to pay a claim, but you may even end up charged with a felony or misdemeanor.
• Trying to get more money in a claim settlement: Many people pad insurance claims in an effort to get more money when making a claim instead of reporting based on the actual loss. This kind of behavior is dangerous because it puts you at risk of insurance fraud. When you have a legitimate claim, just be honest and report the information to the best of your ability, and you will get your due payment. Take what you are owed, be honest with declarations, and avoid what could be a very bad situation that could impact the rest of your life.
• Trying to get insurance when you may not be eligible: High-risk markets exist that can insure you even when you think you’re uninstallable. If you are having a hard time finding insurance, contact the state insurance commissioners office and ask what solutions they can recommend. Read more…

Auto Insurance nowadays are very helpful. It can do the basics, though. You can pay your bill and view your documents through the app. It also has roadside assistance access, quick views of your policy information, and more. You can also file a claim, update your payment method, and even send photos for claims.

STUDY: ONE THIRD OF AMERICANS LIE ON AUTO INSURANCE APPLICATIONS

Most people agree that honesty is the best policy, but when it comes to filling out insurance applications, many consumers are willing to fudge the truth to get a better rate. According to a study from finder.com, an estimated 35 million Americans have lied on an insurance application.

Almost one in three (29 percent) of the people who have lied on an insurance application have done so for car insurance. That amounts to 10.2 million Americans who were willing to lie to get the best coverage for the road.

Following car insurance, false information is most likely to appear on applications for health insurance (22 percent), life insurance (21 percent), income protection insurance (8 percent), travel insurance (7 percent), home and contents insurance (7 percent) and pet insurance (5 percent).

More men lie than women, but women are more likely than men to lie on an application in five of seven categories: health insurance, income protection insurance, travel insurance, home and contents insurance and pet insurance. Men lead women when it comes to lying on car insurance and life insurance applications.

“Taking creative liberties on your insurance application may seem like an innocent white lie, but it’s actually considered fraud, and the repercussions can be serious. If found out you may be charged a higher premium, denied a policy or even charged with fraud, requiring you to pay a fine or even do jail time,” said Finder’s consumer advocate Rachel Dix- Kessler.

There are numerous ways to save money on car insurance. The Insurance Information Institute has these tips for shopping around for the best policy.

Bottom Line

Mobile insurance apps can become efficient and irreplaceable tools that can save time both of agents and customer since it will eliminate the necessity of personal visits to the office. Also, you will get one more channel of remote distribution of your services. This channel will be available for customers anytime and anywhere. Apps have taken over and they are making people’s lives easier, just like our smart driving app makes car insurance – and ownership- easier.