When you go to a gadget store to purchase a laptop, you pay the cost of the laptop and get the device in return. However, that is not the case when it comes to car insurance. You pay the premium and you receive a policy document. This policy document is more like the acknowledgement of a promise made by the insurer to the policyholder in exchange for the insurance premium. The promise is about providing financial assistance in case of unfortunate events involving the insured car as per the policy’s terms and conditions. The promise also requires the policyholder to be truthful and it is important to avoid lying while buying/renewing/claiming car insurance.
Here, the policyholder trusts and believes that the insurer will fulfil the promise when the need arises. Similarly, the insurance company trusts the policyholder and the information provided by the policyholder. Therefore, trust is an important component of an insurance contract and that is why, you as a policyholder, must never lie to your insurer.
- Things You Shouldn’t Lie About to Your Car Insurance Company:
- Common Car Insurance Lies Told by People:
- Why Do People Lie to Insurance Companies?
- Why You Should Never Lie to Your Insurer?
- What Can Happen If You Lie to Your Insurance Company?
- How to Get Cheaper Car Insurance the Right Way?
- Frequently Asked Questions:
Things You Shouldn’t Lie About to Your Car Insurance Company:
Simply put, you shouldn’t lie about anything to your car insurance company. Be honest, transparent, and cooperative while purchasing the policy and during the claim settlement process. The consequences of lying to your car insurance company include rejection of claim application and legal issues concerning fraudulent activities.
Common Car Insurance Lies Told by People:
There are several instances of people lying concerning their car insurance application. Here are some of the common aspects people lie about while buying car insurance or while raising a claim.
1) Vehicle Condition
People indulge in lying about the age of the car while buying car insurance. Some also tend to share false information about the damage and the vehicle’s condition while raising a claim and during the claim inspection process.
2) Vehicle Usage
Private vehicles need to be insured by a private car insurance policy and vehicles used for commercial purposes need to be insured with a commercial car insurance policy. Some people might lie about the car’s usage—where occasionally, a private car with a private car insurance policy will be used for commercial purposes.
3) Claim History
Claim history plays a crucial role in determining the car insurance premium. It has a direct impact on the No Claim Bonus calculation in case of a Comprehensive car insurance policy. People can misrepresent information related to claim history while renewing the policy or switching to a different insurance provider.
Why Do People Lie to Insurance Companies?
Some people lie to their insurers knowingly, while some do it unknowingly. Some do it to meet a goal while some do it out of ignorance. Here are some of the reasons why people might lie to their insurance companies while buying or renewing a policy or during the claim settlement process.
1) Save Money on Insurance Premium
There’s not much scope for premium manipulation when it comes to the basic Third-party Liability car insurance policy. However, things are different when it comes to a Comprehensive plan with Add-on covers. For a high-end car, a Comprehensive policy with a couple of Add-on covers can be expensive. Therefore, the policyholder or unethical middlemen can lie about the insured car to reduce the payable premium.
2) Receive More Money in Claim Settlement
This type of manipulation is more frequent compared to other reasons. Those who want to take undue advantage of the policy can state that previously occurred damages also took place because of the covered incident and claim insurance for it.
For example, Mr A had a Third-party only policy for the first year and moved to a Comprehensive plan in the subsequent year. He had accidentally damaged his car’s door in the first year but because it was a Liability-only policy, he could not raise a claim for Own Damage.
Just after renewing his insurance plan with a Comprehensive policy, his car got damaged. And while raising a claim for recent damages, he mentioned that the previous damage (damage to the door) also happened because of the recent accident and tried to claim repair expenses for it.
3) Get Insurance When One is Not Eligible
People might manipulate details to fit certain eligibility criteria. For example, certain Add-ons are not allowed for old cars. Age manipulation enables policyholders to avail such Add-on covers.
Why You Should Never Lie to Your Insurer?
You should never lie to your car insurance company because it is unethical to do so. By manipulating information, you are disrupting the base of the foundation of insurance. Being untruthful in an insurance contract can be termed as a fraudulent activity as well. Therefore, it is better, to be honest, and avoid lying when it comes to car insurance.
What Can Happen If You Lie to Your Insurance Company?
Insurance, in a way, is a legal contract. Lying about details in a contract is never encouraged. If you are thinking about what happens when you lie in a car insurance contract, read ahead to know the answer.
1) Policy Cancellation
If it is found out that you have lied in your insurance contract, there are chances that the insurance company might cancel your policy. This way, you will be left uncovered by a car insurance policy till the time you get covered from another insurer. This can get inconvenient because driving a car without insurance is a punishable offence.
2) Claim Denial
When you raise a claim, the insurance company assigns a surveyor to check the authenticity of the request. A surveyor can be an in-house employee or a Third-Party Administrator. They perform a detailed check before approving a claim. If they find that the information provided in the claim request is false, they will reject your claim request straightaway. You will lose the insurance support and will have to pay for the car repairs from your pocket.
3) Legal Consequences
Lying while buying or renewing a car insurance contract can amount to cheating. It can be termed as a fraudulent activity by the insurance company. A case might be lodged against you for attempting to cheat the insurance company. Depending upon the intensity of falsification, you can be charged with a hefty monetary penalty or spend time in prison.
How to Get Cheaper Car Insurance the Right Way?
There is no need to be dishonest or rely on unethical means to reduce the payable premium on your car insurance policy. If you are looking for ways to buy a less expensive Comprehensive car insurance policy without compromising on the coverage, here’s how you can do so.
1) Analyse Requirements
Before checking out what kind of policies are available at what prices, analyse your car insurance requirements and think of a suitable plan. The best plan in the market might not be ideal for you. Figure out what kind of coverage works well for you first and then proceed to compare policies.
2) Compare Policies
Once you are aware of your requirements, conduct basic online research concerning which insurer is providing that coverage at a price that is affordable for you. Do not be blinded by low prices—check if they are offering enough coverage. Go for a policy that has a fine balance between premium, coverage, and services.
3) Online Car Insurance
You can choose to buy or renew your car insurance policy from your car dealer, offline insurance avenues, or through an online insurer’s website. For example, spending a few minutes on www.acko.com will acquaint you with the price, coverage, and services associated with the plan offered by the company. Online car insurance can be less expensive when compared to the price charged by traditional motor insurance policies and agents, as they have fewer overheads and do not rely on middlemen for sales.
Frequently Asked Questions:
Providing incorrect information while buying or renewing a car insurance policy is a serious concern. The points mentioned in this article highlight the importance of providing accurate information and the consequences of not doing so. Here’s a list of common questions that people have about this topic.
Yes, you can correct information provided while buying or renewing a car insurance policy by getting in touch with the insurance company at the earliest. The process of changing details in the policy document is known as a policy endorsement. The insurer will check your request and state the way ahead concerning the policy endorsement process.
Yes, providing false information can lead to legal consequences. The exact legal issue will depend upon the nature of the incorrect information and the insurance company’s intent to pursue the case.
You have more control in the online buying process. You must visit the preferred insurer’s website and share personal and car-related details to buy or renew an insurance plan online. Therefore, you are in direct control of the information being shared. If you opt to buy a policy from an agent, you must share information with the agent and then the agent will share the information with the insurance company. Therefore, you are not in direct control in this method and the probability of errors can be higher.
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