Common Lies Policyholders Tell Auto Insurance Companies
Most motorists would know that providing false information while they are buying vehicle insurance would get them into trouble in the future with claims. However, it may be tempting to twist the facts a bit or in some cases a lot to get cheap auto insurance quotes. Vehicle insurers can check on the accuracy of the information provided to them but they would in most cases trust the policyholders.
It costs time and money to investigate every applicant. Besides, only few people would lie on their vehicle insurance applications. Not checking at the time of application does not take away their rights to do so whenever they choose. Generally, these things would come up at times you want to hide them the most, which is when you have a claim.
Here are the main areas motorists may be short of telling the full truth when getting car insurance quotes;
Mileage Driven: is an area auto insurance companies suffer the most. Companies lose nearly two billion dollars every year because policyholders underestimate the mileage, they drive every year. These days some companies are working with specialist firms to estimate the possible mileage you may drive. They look at the details provided and suggest a likely number for yearly miles covered.
However, most companies still rely on the applicants to tell them the truth. The higher you estimate the higher your insurance costs will be. The fact is that the chances of being involved in accidents would increase the longer you stay on the roads. You may not be able to accurately guess the mileage you will drive within the next year but you must have a good idea.
At certain points the effect of these numbers can be much higher. For example, driving under 5000 miles can qualify you for inexpensive vehicle insurance. In the same way keeping it under 30,000 can avoid paying higher bracket prices. Also, there are many motorists who overestimate their yearly driving and miss out on possible discounts.
Home Address: is where you reside most of the time. People drive their cars in the areas they live. They go to work and pick up children in that area every day. This address must be where you are residing most of the year and not a second home you have in the countryside. When you provide misleading information, you may pay a lot less premium but would it be fair to the insurer?
Also, it may come back and bite you. Companies may easily become suspicious when you have an accident far away from home and start searching. There are a lot of paper trails in relation to your home address that it will not be hard for them to work out the truth. They can ask your neighbors, check where you work and check utility usage in your city home and where you registered the car.
Automobile insurance premium differences can be over thousand dollars in some cases. The companies can do a few things depending on the situation. They can void the policy from the inception date. This will have the effect as if it never existed. They may refuse to pay a claim. Or they may demand the premium difference from the start. In some cases, they may start legal action against the policyholder accusing of insurance fraud.
Vehicle Usage: is another area people may not be honest enough. Using a private automobile for business purposes requires additional coverage and premiums in most cases. It would be safer to pay the little difference and get insured properly. By the way, you are not allowed to carry passengers or goods for a fee with your private auto insurance policy. If you are carrying your employees for free of charge this would probably be considered carrying passengers for a financial gain and not allowed again.
There are many other small and large lies told to companies to get or keep low rates. When you sign up for a policy you promise to tell the truth to the best of your knowledge. It may be best to keep this promise for the sake of effectiveness of your policy in the long run.