How Being Honest Gets You the Best Car Insurance Rate

Fran Majidi
March 12, 2019

Several marketplace insurance companies have conducted surveys on the number of people who lie on their car insurance applications and why they do it. The numbers are shocking, but what’s even more surprising are the consequences that people face after giving a false answer or by omitting a truth they assume will raise their premiums. Lying about your driving history or your address is a bigger deal than you’d think. Read more to see what can happen if you give false information on your insurance application.

What Are People Lying About in the Car Insurance Application?

They are lying about many things but the top four fibs are as follows: giving incorrect annual mileage; lying about the garaging address; omitting the names of people who also use the vehicle; lying about gaps in coverage; saying you have anti-theft devices that you don’t have; lying about education level, lying about marital status and neglecting to report tickets or accident history. Do you lie about these things? You may be thinking that it’s no big deal to sprinkle a little BS on your application for a discount on insurance, but think again!

Why You Shouldn’t Lie on Your Car Insurance Application

According to several surveys, only a small percentage of those who lied got away with it. The overwhelming majority were punished in the following ways: Insurance claims were denied; Insurance rates went up; The policy was placed on non-renewal; the policy was cancelled; the policy holders were sued for fraud.

As nightmarish as getting busted for fraud sounds, that’s what lying on your insurance application amounts to. Don’t assume that you’ll walk away afterwards with a slap on the wrist. Insurance is a legal contract after all. On the application, you even get a chance to let that reality sink in and change the information if it’s inaccurate. So, don’t seem so shocked if you get busted for lying about the 10 points on your license.

Nonrenewal of Car Insurance

If your insurer tells you they will not renew your policy because of the misinformation you reported, they are letting you off easy because there is no stigma with a non-renewed policy. Nonrenewal can happen for one of many reasons, including the phasing out of a certain kind of coverage or because the insurer is trying to write fewer (or no) policies in your region.

Car Insurance Cancellation

Now, cancellation is a whole other story. Insurers will know that your car insurance was canceled and they’ll know it was because you did something wrong. The reasons for car insurance cancellation include, misrepresentation on an application (lying), license suspension or revocation, DUIs, too many accidents and/or moving violations and non-payment. None of these reasons are very forgivable, so think twice  before lying or omitting important information on your application.

Getting covered after your insurance is cancelled is not an easy task. You’ll probably have a hard time getting another standard car insurance, and if you stall in getting insured right away, you risk digging your hole even deeper.

If you have legitimate reasons for having omitted information or you didn’t pay your bills for reasons beyond your control, it’s important that you contact your agent for help right away. Don’t let your situation sit for a minute. Be very proactive.

If you haven’t lied or done anything wrong but your insurer is treating you unfairly, contact your state insurance department right away.

Getting Insurance After Cancellation

If you can’t win against a cancellation, you will need to buy nonstandard insurance. Many larger insurance companies have nonstandard policies for high-risk drivers. Subsidiaries include Titan, Victoria, The General, etcs. While a higher risk insurance policy is expensive, you can clean up your record and qualify for a standard insurance plan in as soon as two or three years.

Depending on how bad your record truly is, you may not even qualify for a nonstandard policy. If this is a case, you can find an expensive alternative according to your state by visiting here.

If you get a citation for drunk driving, license suspension is highly probable. Extremely high rates are inevitable.

How Much Does a DUI Increase Insurance?

It’s costly for insurers to insure drunk drivers and people who abuse drugs before getting behind the wheel. There’s always a higher chance of an accident, if you haven’t had one yet, or another accident if you were already busted for a DUI that contributed to an accident. Statistics show that those caught with a DUI are especially likely to get caught doing it again.

As for your car insurance rate, a DUI will nearly double what you’re paying now, at least for the first year after you were caught. Your car insurance  rates will slowly fall if you aren’t caught again but they will stay high for years.

Do all tickets affect insurance?

Ideally, you won’t have traffic tickets and collisions on your driving record. However, not all tickets affect your insurance the same way so be in touch with your agent.

The most serious convictions are for DUI, careless driving, racing and other similar situations. After that, there are major infractions that come with slightly less severe penalties: driving without insurance, not reporting an accident, speeding in a school zone, lying on your insurance statements and improperly passing/not stopping for a school bus.

Parking tickets do not impact your insurance rates.

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