Car insurance is expensive. Therefore, it is no surprise that many people would attempt to lie on their application forms to get the lowest price possible. Some people would leave out some information about their car and themselves because they want to try to get a car insurance quote even though they are not eligible. Well, don’t do that!
Lying to your insurer can get you in more trouble. Lying such as supplying false information on your application is also a form of insurance fraud. Remember, honesty is the best policy.
Why do people lie to insurers?
There are a variety of reasons why people lie to insurers. Some of them are:
- Save money – Omit or lie about their information
- Get more money in a claim settlement – Lie about a claim or exaggerate losses.
- Get coverage when they are not eligible – Some may have to pay more due to their accident history, so they lie.
Common reasons why people lie to insurers
Here are some of the main things people usually lie to insurers about.
1. Address
Your geographical location can have an impact on your premium. Some people may try to lie about their address to get a lower premium.
Example: Lying about your address (postal code is a big factor in determining rates)
2. Vehicle use
Using your vehicle for anything other than personal use is prohibited. Many drivers don’t tell their insurers to avoid an increase. You need to notify your insurer if you are doing e-hailing service like Grab or Uber.
Example: Not informing your insurance provider that you use your vehicle for food deliveries or e-hailing services.
3. People who drive the vehicle
Misrepresenting the driver.
For instance: not listing who regularly uses the vehicle, who the primary driver is, and the address of the owner of the car.
4. Vehicle condition
Did not reveal the pre-existing damage.
For example: Modified cars or upgraded features. Failure to disclose can result in a denial of a claim if not included in your policy.
Consequences of lying to your insurer
The following are five consequences for lying to your insurer.
1. Increased premiums
Insurance companies will charge premiums based on the information you provide. If insurers identify incorrect information on your policy they could increase your insurance. It could have a big impact on your annual payments depending on the severity of the lie.
If the company learns about your undisclosed problems in the past, it will have to increase your premium because of your potential risk.
2. Claim denial
Insurers have a right to deny your claim if they deem you were not truthful.
Say if you state your vehicle use is for occasional driving. But in reality, you have a 60km commute to work. If you get into a collision during your commute, the company may deny your claim because you didn’t tell them the truth about your daily driving habits.
3. Cancellation of policy
Insurers can cancel your policy for withholding information or lying. If your policy is cancelled, you’ll likely have to pay more to get a new policy elsewhere.
4. Fines and penalties
You may have to pay money to your insurance company or receive a fine under your insurance regulations. If a claim was paid under fraudulent circumstances, you could be held financially responsible for it.
However, the amounts may vary across insurers.
Lying to your insurer is not worth it
There’s a better way to save money on auto insurance premiums than lying to your insurer. Be honest when filing your insurance application. Your lies may go unnoticed for a while, but they can catch up to you in the long run.
Be upfront and honest. If you notice an error in your policy and coverage, report it immediately to your insurer. If you want to save, we recommend you to do the following tips:
- Research insurance before you buy a vehicle
- Shop around for the best rate possible
- Increase the amount of voluntary excess
- Keep a clean driving record
To help you further, we recommend using insurance comparison sites such as Bjak to compare coverages, benefits and insurance prices for up to 15 leading insurance brands. You can customise your insurance according to your needs and budget entirely online. Visit Bjak to get free car insurance quotes.
Bjak is one of Malaysia’s biggest insurance comparison websites, offering policies from over 10 brands. Get your free insurance quote from Bjak today!
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