“Lying to your insurance company can only bring trouble. Be honest, even if this means paying a little more”, said Russell Rabichev, Marketing Director of Internet Marketing Company.

LOS ANGELES (PRWEB)
December 24, 2019

Applying for car insurance can be a nerve-wracking process. When the prices are higher than expected, many applicants feel frustrated. Some of them may try to hide the truth, in order to get better prices. But when the truth is uncovered, the insurance companies and authorities will react.

Car insurance companies don’t directly share information with one another. Instead, they subscribe to centralized data services, like specialty consumer reporting agencies. These companies provide nformation about a person’s driving record to the insurance companies. Through this system, insurance companies access common information about individual drivers, like recent claims. These include claims that did not result in a settlement and denied claims.

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      Insurance companies usually discover the lies. One common lie is related to annual mileage. Some people present really low values, in order to get discounts. But when they take their cars in for an inspection or repairs, and the odometer reading doesn’t match the mileage the data given to insurance company, they will know you lied. That difference could be enough to trigger a further inspection of your insurance policy, and if it found that the policyholder lied about the mileage, the insurance company can cancel your policy.
•     Insurance companies collaborate with each other. The reason is simple – they want to make sure they are not scammed by high-risk drivers. Another common lie is related to past traffic violations. Insurance companies have access to CLUE reports (Comprehensive Loss Underwriting Exchange). This report contains claim information provided by insurance agencies. So, if a person tells that he was not involved in an accident for the past 5 years, but a CLUE report created by a previous insurer shows a recent history of claims, the company will know that person is lying.
•     Insurance contracts can be voided. Depending on the severity of the lie, the company can decide to void the contract. Naturally, if the driver does not switch immediately, he will also have a coverage lapse. This also can happen when making a claim, and the company will discover the problems. The claim will be denied and the policyholder will have to pay for everything.
•     Expect rates to be increased for a long time. Being caught lying has really unpleasant consequences. In almost all cases, the first penalty is having the premiums increased. And there are likely to continuously increase with each renewal, for several consecutive renewals

Policyholders can be accused of fraud. Some “lies” are considered frauds. Fronting is the most common one. The consequences can even include the auto insurance provider taking the driver to the court which could result in jail time.

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