We’ve all heard the saying; “Honesty is the best policy”. But, when it comes to your auto insurance, it’s true – or, it could cost you. There’s another famous saying which states: “The truth hurts”. Well, in this case, telling the truth will be considerably less painful than if you tell an outright lie to your auto insurance company. Here’s why: You’ll more than likely get caught, usually after being involved in a car accident, and have trouble explaining away those little white lies you’ve been telling.
Believe it or not, insurance companies are like parents – they’ve heard it all before. And, they’re always on their toes. So, if you think you can justify lying to your auto insurance company, think again. Not only won’t your claim be paid out, but you could face fraud charges, a hefty fine, and even do jail time. In addition, you can count on being dropped by your insurance company like a hot potato…and find yourself in the insurance “black hole”, where no insurer will want anything to do with you in the future.
You’re probably wondering how a little white lie could possibly do you harm. Well, there are actually six “don’t tell your insurance company that one” lies that you’ll be busted on…rather quickly. And, no amount of digging will get you out of the hole you’ve dug for yourself. These six little lies are:
1. Lying about traffic tickets or accidents – If you get caught in this lie, you’ll have asked for it. This one is the easiest for insurance companies to research. Using the “I forgot” defense won’t work here. The speeding ticket you got in your home state or in another state that has an interstate information sharing arrangement will get you busted – fast. That goes for neglecting to mention any fender benders you’ve had. It’s better to take your medicine now – than later.
2. Lying about who the main driver is – This, in the insurance industry, is referred to as “fronting”…and, it’s illegal. In other words, you claim to be the main driver on a car when, in truth, the main driver is actually someone who would normally be paying much higher rates. That would include parents who name themselves as the main driver of a car driven by their college-attending child.
If by chance, your child is involved in an accident, your claim could be denied, you could be forced to pay back premiums, or even worse – be looking at fraud charges and lots of legal problems.
3. Lying about the amount of miles you drive – Okay, so…guilty as charged. We’ve all probably fibbed about the number of miles we commute, and this one can definitely come back and bite you – hard. Lying about the length of your daily commute can place you in the tough position of explaining what you were doing 55 miles from home if you have a mishap.
You may also find yourself paying for the damages to your car and the other guy’s car yourself. While you may have to pay a few extra bucks for telling the truth, it beats getting stuck with a hefty tab if your insurance company decides to play hard ball.
4. Lying about your address – Telling a lie about where you live may save you some money, especially if you live in a major urban or high-crime area. Your cousin lives in an area with much less traffic and he’s paying a lot less than you are. So, you decide to use his address to pull a fast one on your insurance company. Bad idea.
While it may be tempting, your insurance company regards it as fraud and a crime. Not only that, but if your car gets damaged or stolen from your urban residence, guess what? You could find yourself uninsured, made to pay for back premiums, dropped by your insurer, denied future insurance coverage or charged with fraud and prosecuted under the law.
5. Lying about how you actually use your car – If you use your car or truck for work, such as handyman services or delivering take-out, you may want to be extra careful. Although you may be lowering your premiums, insurance companies take a dim view of drivers who lie about how they use their vehicles. Once again, you’re talking fraud.
Furthermore, telling your insurance company that you’re not using your car, or not using it for business purposes, but on your tax returns you claim it as a business expense, is simply asking for trouble – not just from your insurance provider, but from the I.R.S. You don’t even want to go there.
6. Lying to get discounts you’re not entitled to – Some insurance companies might give various discounts to their policyholders, such as memberships to unions, AAA, and other professional groups. Don’t try to continue benefiting from discounts you no longer qualify for. You may consider not informing them of the fact you’ve terminated or cancelled your affiliation with the organization as a white lie. But, your insurance company looks at it as a more serious breach of trust.
So, practice a little common sense and, in the long run, you’ll realize that, when it comes to lying to your insurance company, the considerable risks and consequences far outweigh the benefits. And, honesty may actually be the best “policy”.
While honesty is a good policy…saving money is equally as important. Make sure you’re getting the best rate on your auto insurance. Why not get a free auto insurance quote today?
Have you ever fibbed to your car insurance company and got caught? Feel free to share your thoughts in the comments section below.