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When an accident occurs, some people think that it is okay to withhold facts or lie about it to the insurance company. This motivation arises when they feel the need to save up on money. Some clients feel as though they have paid higher premiums in other incidences and calamities and feel some level of entitlement from the auto insurance company.
Withholding fact or providing false information is a bad idea, and it is considered fraud. When the truth finally comes out, there are consequences. Some of these consequences leave you with a permanent record or a big dent in your bank account. Consequences include;
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Cancellation of your insurance policy
When this happens, it means that you will have to pay more to acquire a new insurance policy. When a plan is canceled because of non-disclosure, it puts you in a high-risk category. This means that you’ll have a difficult time before you acquire a new auto insurance policy.
Denial of the intended claim
You cannot make a claim based on a lie. For example, you cannot use your car for long-distance driving, and then when an accident occurs, you claim to have only used it to go to work. When the truth finally comes out, your auto insurance company will refuse to pay your claim because you did not tell them all the information about your driving activities.
You incur high insurance premiums
Insurance companies charge premiums and provide policies based on information that you ideally or truthfully provided. According to most insurance companies, if you are a constant driver and have caused an accident before you risk another disaster in the future.
This means if you don’t disclose all the accidents in the past and the insurance company learns about it, your premiums go higher. This is because you are in the high-risk category.
You end up being denied auto insurance in the future.
Lying to your auto insurance company will land you in more trouble, be it that you lied about your tickets or an accident. When your auto insurance company discovers you lied, they have every right to deny you auto insurance in the future.
Your risk facing penalties and fines
Insurance regulations dictate that if you lied about your past accidents, you are required to pay money or receive a severer punishment from your insurance company. The amount paid varies if your claim had been paid, and the circumstance was a fraud, you will be financially responsible. An auto insurance company could sue you to recover damages and costs.
Your risk facing criminal penalties
False Insurance claims will lead to a permanent criminal record, substantial fines, or you could end up locked up in jail. Withholding information or lying might seem a good idea at that moment, but according to the law, it is insurance fraud. According to Canadian constitution, when an insurance fraud occurs, the client ends up paying up to 15% more for the auto insurance premiums.
