We are all used to car insurance agents grilling us with questions at the time of purchase of the insurance. Many of those queries seem funny and we really do not think twice about responding to them with a few cheeky lies. For instance, you might be a speed-loving driver but you state yourself as a cautious driver. What seems like a harmless lie can, in reality, prove fatal to your insurance.
At the time of making a claim, these lies prove as the reason for your claim getting rejected and can even look like insurance fraud. Consequently, not only would your car insurance policy get rejected but you might also face a few unpleasant consequences like fraud and in severe cases, penalty and jail.
Here, we highlight a few innocent white lies that you might say unintentionally but can lead to serious consequences for you. Read on!
- The way the car is used
Car usage is broadly divided into three categories- social, social and commuting and business or commercial use. Social use is your personal use except for daily travel to your work and vice versa. If you are using your car to travel to work, then you need to choose the second option. But if you are using for commercial purpose and making money out of it; then it will fall into the last category. There is generally a higher premium charged for the second and the third category as the risk of an accident is high there.
If involved in an accident; the claim can be rejected if your provided information is proved wrong and the case can be deemed as insurance fraud.
An essential feature and premium-deciding factor of Car Insurance Policy is the name of the main driver or the person who would be predominantly driving the car. The premium cost for a young driver is often high. To combat it and procure a cheaper premium amount, many parents give their names as the main driver and furnish their children’s names as the secondary driver.
This is called ‘fronting’ and is a serious case of fraud in the eyes of an insurance company. The insured is bound to face serious consequences if proved guilty of this crime.
Most of us do not think twice about mentioning our occupation. We also do not think of informing our insurance company if we are changing the occupation. But it is one of the premiums deciding factors of car insurance and any wrong information will be deemed as fraud.
- Withholding claims or car damage history
While stating information about car damage and claims; we might state of serious accidents but often skip on small accidents like dents or scratch. This is because we are not making any claims for it. However, they are also important and you must disclose these seemingly small accidents as well.
Many policyholders do not feel the need to disclose about any car damage if they have paid the repair costs from their pockets and not made any claim. But even these accidents and damages need to be reported to the insurance company.
It must be noted that the number of accidents you have been involved in is a deciding factor for the car insurance premium. A higher number of accidents would equate to a higher premium amount.
- Not owning up to penalty points and other driving convictions
When driving a car, you are bound to collect a few driving offenses below your belt and thus accumulate some penalty points. You are expected to disclose all of this information at the time of procuring the policy. You are also expected to inform the insurer immediately of any driving points collected during the term of the policy instead of waiting for the time of policy renewal. Disclosing this information would save you from getting your claim rejected and facing any legal consequences.
We all look for ways to pay a low insurance premium but the avenues we choose must be right and ethical. Most insurance work on the principle of ‘good faith’ and we must be particularly careful of being honest to the core while disclosing the information for a car policy procurement. It might mean a slightly higher premium but would keep you on the right side of the law and protect your claim application from getting rejected.