Effects of Lying to Get Cheap Car Insurance Rate

Wrong Way to Get Cheap Car Insurance Rate

Among all other types of insurance, car insurance seems to command the attention of many people. This may be unconnected to the fact that car insurance is made compulsory in many countries or states. That is, it is expected that car owners should insure their cars. Anything contrary to this may be deemed as illegal. For example, in USA it is mandatory that all vehicles must be insured with the exception of New Hampshire where you are not mandated to insure your car. Nevertheless you will need to prove that you can pay for damages which may be up to the liability of $50,000 and $25,000 in respect of property damages. This amount is quite high indeed. Personally, I would rather prefer paying insurance premium to risking paying such high amount of liability.

Truly, car insurance can be very expensive depending on where you live and the type of your car. I want to believe that it is on this note that the concept of minimum car insurance requirements was introduced by each state. If you are going for minimum car insurance, you may be able to reduce your cost of car insurance considerably. With the minimum car insurance, motorists may no longer have excuse for not insuring their cars. Because of the legal implications of not insuring a car, it is like bringing people under compulsion to insure their cars whether it is convenient or not. No wonder you see some people engaging different tactics to keep their car insurance premium to the barest minimum. One of the popular ways people use to ensure that what they pay as car insurance premium is low is to shop around so that they can compare rates. Others may choose to increase their deductibles. There is nothing bad about it as long as you do it under the ambit of the law. But there are some people that tell lies about themselves, their vehicle and their situation in an attempt to get cheap car insurance quotes. Whether they do it deliberately or by mistake, you should understand that telling lies is not a good way of lowering your car insurance rate. Insurance companies may not bother to investigate some of the information you supply at the point when you purchase your car insurance policy. Events may happen that may prompt them to carry out necessary investigation. If they discover that you lied or that the information you gave them were inaccurate, the outcome may not be to your advantage.

Read Also: How to pay for auto insurance premium

Before, I discuss the possible effects of lying or supplying false/inaccurate information when buying your car insurance policy, let me quickly share with you the possible areas where people usually give information that are incorrect. I am not telling you this so that you can tell lies too. It is just for you to watch out for them so that you don’t fall victim of the possible consequences. It may interest you that not everyone that provides inaccurate information does that because they want to do so. If you want to get car insurance quotes, every insurance company you contact will ask you series of questions. Some people don’t actually prepare for some of the questions. Since they need to provide the information before they can be given a quote, they may end up giving wrong information. Unfortunately, the insurance company will give quote based on the information made available to them. Below is some of the information that insurance company may want you to supply:

  • Driving record: Insurance companies will like you to provide information about your driving record. Also, if you want to add other drivers to the policy, you will need to let the insurance company know about their driving records too. In a situation whereby the policy will cover more than one driver, you will need to tell the insurance company who the primary driver will be. People tell lies in this area in order to get cheap car insurance rate. For example, people may tell lie about the age of the additional driver or who the primary driver will be. If you are adding a young driver to a car insurance policy, your car insurance rate tends to increase. The reason is that, young people are more prone to driving recklessly than the older or married people. Also, people tell lies about who the primary driver will be. A person with history of accident or having booked for tickets will attract higher car insurance rate than somebody with a clean record. At the initial stage, it is actually possible for the insurance company not to be able to counter your information. It may be difficult for them to know who the primary or main driver of the car may be.

Read Also: The magic of searching for “car insurance near me”

  • The car you want to insure. Insurance companies will definitely ask you information about the car that you want to insure. The type of your car contributes a lot to the amount of car insurance rate you will pay. You will need to provide information about the type of your car, its age, its make and model.
  • Insurance claims history: It is right for any rational thinking person to speculate that people with insurance claim history have tendency to make new claims. That is why insurance companies charge people with claims history higher car insurance premium. People know about this fact. That is why some of them deliberately tell lies about their claims history so that they can get car insurance quotes that are lower than what they would have been charged.
  • Credit Score: Financial institutions and creditors rely on credit score to measure the creditworthiness of individuals. If you have no credit history, it will be difficult to determine your credit rating. Also, if you have bad credit history, insurance companies will assume that you may likely default in the payment of your premium. It is more expensive for insurance companies collecting premium from people that make late payments. Therefore, the car insurance premium of people with no or bad credit history will be higher. Credit score is verifiable but you discover that people still give incorrect credit score. This may be due to the fact that they don’t even know what their credit score is or their credit score has dropped from the level it was when they checked it last. Before you start shopping for car insurance quotes, it is better to find out what your credit score is so that you don’t give wrong information to the insurance company
  • Age and gender: As mentioned before, insurance companies will like to know your age. Young drivers pay higher car insurance premium. However, you may not be able to tell lies about your age and gender. It is possible to tell lies about the additional drivers you want to add to the policy
  • Marital status: Married people tend to be more cautious while driving. They will like to think about what might happen to their family if they get involved in accident which may cause them to be incapacitated. If you are not married, you should not claim to be married as this may make you get lower car insurance rates. This may be seen as a fraudulent practice.
  • Parking location: Where do you normally park your car? Don’t be surprised to hear this type of question from your car insurer. A car parked in the garage is more secured than the one parked in the open space or by the road side. Thief can easily get away with a car parked by in the open space. Therefore, this will also reflect in the car insurance quotes you will likely get.
  • How you go to work: Do you drive to work every day? What is the average distance of your place of work from home? The distance will determine the average miles you will need to drive per day. The longer the distance, the more the possibility that you will get involved in accident or that you run into another person’s property. If you commute to work instead of driving yourself or the miles you cover every day is not much, you will be able to get cheaper car insurance rate.

You need to understand that there is no limit to the questions that insurance companies may ask you. You just need to prepare yourself so that you can have the information at the tips of your fingers. For any question that you know you don’t have accurate answer, it is better you tell the insurance company the truth. Also, if your situations change after you have bought your car insurance policy, you should quickly let your insurer know about it.

Read Also: Why Cheapest Car Insurance Quote May Not Be the Best

Effects of telling lying to get cheap car insurance rate

What happens if your car insurer later finds out that you have supplied incorrect information which formed the basis for the car insurance quote you were offered? Well, the end result is not that favourable. Let’s see the possible outcome of what can happen if you tell a lie to get cheap insurance rate.

Higher insurance rate: The best option you may get is to have your premium revised to what it should have been if the correct information was known to the car insurer at the initial stage. The real insurance rate will be calculated while the original amount you have paid is deducted from it. You will then need to pay the difference. This looks very simple but mind you, it is not always like that. The insurance companies will only choose this option if they are convinced that the wrong information was not deliberate. It can be by omission or you didn’t have enough information at the point when you bought the car insurance policy.

Cancellation of your car insurance policy: If your car insurer discovers you told a lie when processing your car insurance, the car insurance policy can be cancelled. You might also lose the premium you have paid as the insurer may not be under any obligation to make such refund. That is one of the terms and conditions attached to car insurance policy. If your car insurance policy is cancelled, you may find it difficult to get new policy. You should be aware of dangers of driving a car without insurance. If you are caught, you may be penalized and asked to pay a fine. If you find any insurance company that will be willing to insure your car, you should expect to pay a very high premium.

Charge for fraud: It is totally illegal to tell a lie in order to get cheap car insurance. You can actually be charged for fraud and this is a criminal offence. If you are found guilty, you can be sent into jail.

Read Also: Understanding Umbrella Insurance

Claim denial: Do you know why some insurance companies may not bother to investigate some information you provided at the point of purchase of your insurance? Some investigation may attract some costs which may not be cost effective to the insurer. But that is not to tell you that all is well. The insurance company may be waiting till the time you will file a claim. You may think you will not file any claim but situation may arise that will necessitate that. When such event happens, don’t be surprised if your claim is declined. At that point, it will become clear that telling a lie to get cheap car insurance rate is like the case of penny wise, pound foolish. Therefore, be warned!

One thought on “Effects of Lying to Get Cheap Car Insurance Rate

  1. Hi MFK, I agree 100% you have to be honest when it comes to insurance. I look at insurance as getting the best insurance at the cheapest price that will cover your needs and hope I never have to use it. (Especially life insurance)

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