Consequences of lying to your auto insurance provider
There are several situations in which you may be tempted to lie about your location to your auto insurance provider. For instance, maybe your parents live in a safer area, or maybe you moved to a new state without ever changing your auto insurance. Whatever your reason, it’s important to understand the risks associated with lying to your auto insurance provider. Here’s why you should never conceal the truth about where you live.
Lying is Fraud
While lying about your zip code may seem harmless, it’s important to understand that this constitutes an act of insurance fraud. Not only does this violate the terms of your auto policy, but you could actually face legal consequences as well. Here are some of the common penalties associated with lying about your address.
- Denied coverage– If you file a claim, but your auto insurer discovers that you are lying about your address, then they have the right to deny your claim.
- Increased premiums– Following the discovery of your lie, your insurance provider will increase your premiums because you have proven yourself a reckless, irresponsible policyholder.
- Policy cancelation– In some cases, your insurance provider may decide to cancel your policy completely. This means that you and everyone covered under the policy would be left without coverage.
Why Is Location So Important?
You may be wondering why auto insurance providers are so concerned with your location. Well, your location plays an important role in how your insurance premiums are calculated. When you lie about your address, the insurance company cannot charge you an accurate rate. Auto insurers take the following location-based factors into account when determining your premiums:
- Local crime rate
- Accident rate
- Whether you live in a rural or urban area
- How affluent your area is
Will I Really Be Caught?
If you lie about your address on your auto insurance application, you will almost surely be caught. This is because your insurance company will painstakingly crosscheck all the information you provided to verify its accuracy. If your lie is uncovered, then the auto insurer can choose to deny your application. Even if your application is approved and your lie is not caught, there’s a good chance of you getting found out in the future. For instance, many insurance providers discover the truth while investigating claims. If your lie is discovered at this point, then expect your claim to be denied.
This is what will happen if you lie about your location to your auto insurance provider. Do you have more questions about your car coverage? For assistance with all your coverage needs, contact an insurance professional at Westwood Insurance Agency today.