What if You Lie on Your Car Insurance Application?

Insurance companies take the application process seriously — and you should too. The answers you provide at any point during the application process are subject to verification. Additionally, the answers you provide to your insurance company are what will determine your insurance rate. 

You may feel like you need to lie about an accident you got into or the amount of speeding tickets you’ve gotten in order to get your rates to go down. But if you’re caught in a lie, the consequences could be very damaging. 

When you apply for a car insurance policy, your application will start out with basic information. Some of the information that you’ll need to provide will include your:

• Name
• Full address
• Phone number
• Email address
• Driver information (if you’re including more than 1 driver on your policy, you’ll need to provide his or her personal details as well)
• Vehicle information (this can include the condition, make and model of your vehicle).
• Current insurance information (this can include your current deductible, the company that you purchase your insurance from, the types of coverage that you have and more)

You will also be asked a number of questions during the interview portion of the process. The types of questions asked are decided at the insurer’s discretion. Some questions that you may be asked are:

• What is your occupation?
• What is the highest level of education you’ve completed?
• Are there any violations on your record?
• How far do you usually drive your vehicle to work?
• Do you have any accidents or claims on your record?
• How many drivers live in your household?
• What coverages do you want on your policy?

The insurance company also may ask questions you alreadyhave answered to on the application. It’s important to give the same answers throughout the whole application process to avoid getting caught in a lie. 

The underwriting process will take place after the interview. This is the verification process, and the insurance company could discover any inaccurate information you gave them.

Most people aren’t very good at long-term lying, and getting caught in a single lie can put your entire application into jeopardy. It’s much easier and more effective to tell the truth throughout the application process. 

Why Are You Lying?

It’s easy to see why you would lie when trying to get auto insurance. You’ll get a cheaper rate if you claim you keep your car in a quiet neighborhood rather than in the city where it actually is. Or you might be afraid that your recent car accident will result in higher rates. 

While telling a little white lie on your car insurance application might seem like a good idea, the truth is that these will all look like poor excuses if your insurance provider discovers even a small lie on your application.

Common Car Insurance Application Lies

Are you thinking about lying on your car insurance application? If you are, know that the following lies are common — and easily caught by insurance providers.  

• Your driving and accident record: It’s true that being involved in an accident or traffic violation can increase your rates. However, insurance companies can easily look up your driving records — and they will before they offer you coverage.
•  Who’s on your policy: Having inexperienced drivers on your policy will raise your rates. But what happens when that teenager you lied about having on your policy needs to file a claim or is involved in an accident? Police reports will easily uncover this lie.
•  Where you park your car: If you park your car on the street and claim that you pay for a garage space, your insurance company will check to see whether you have a reserved space when you file a claim. If you don’t, you’ve just committed insurance fraud. 

The Consequences of Lying on Your Car Insurance Application

You could face a number ofconsequences when you lie to your insurance company. That little lie you told is actually considered fraud, so there are consequences.

The most common consequence is that your insurance policy could be cancelled. If your insurance policy is cancelled, no matter what the reason, you are automatically placed into the high-risk category of insurance. This could make it difficult to find a new policy with any insurance company. 

It also will increase your rate no matter where you go. High-risk drivers have the highest rates, so the lie you told to pay less for insurance could end up costing you in the long run. 

If you need to file a claim, even a minor lie gives your insurance company the right to deny your claim. If your lie is uncovered because you’ve filed a claim, the insurance company can deny the claim altogether. 

For example, imagine you get into an accident on your way to work and you submit a claim to your insurance provider, but you told your insurance company that you work from home every day. Your insurer then denies your claim because the information you gave them was inaccurate. This could result in you having to pay for any damages out of pocket.  

If you lie in an attempt to bring your premiums down, getting caught in that lie will significantly raise the amount that you pay for insurance. The information you give the insurance company when you apply for a policy is what they use to determine your premium. 

If you provide inaccurate information, the information will need to be adjusted and the premium will adjust with it. Plus, because you now have a proven track record of lying, you’ll likely pay even more than you would have if you just told the truth in the first place. 

You could even face fraud charges if your insurance company catches you in a lie when you attempt to file a claim. This potentially could lead to jail time and to having a permanent criminal record if the lie was substantial enough. 

Most people don’t think a little lie to get a better insurance rate could be considered fraud, but it can be — and you’ll face consequences if the insurance company decides to press charges. 

Don’t lie on your car insurance application in an attempt to get better rates. Instead, work with one of our favorite affordable insurance companies below. 

The Bottom Line

You should never lie at any point when you’re trying to get auto insurance. You may think it won’t amount to anything other than getting a lower rate, but it could backfire at any point. 

If you make a mistake and write down the wrong information on your application, be upfront and honest with your insurance company. If you don’t handle it right away, the chances of the company believing it was an actual mistake will be slim.  

Remember to report all drivers for a vehicle, list the real parking location for the vehicle, verify the mileage before putting down a guesstimate, list all tickets and accidents and, most importantly, update any and all information when you are making changes to your situation. Though all of these steps might seem like overkill, they’re better than facing fraud charges from your insurance company. 

Frequently Asked Questions