What is Car Insurance Misrepresentation?

What is Car Insurance Misrepresentation?

Understand what insurance misrepresentation is and what consequences it might incur.

Also known as material misrepresentation, car insurance misrepresentation is a type of insurance fraud.  When you apply for auto insurance in Astoria, New York, the insurance company will ask you a number of questions.  If you do not answer these questions honestly, then you are guilty of car insurance misrepresentation.  In simple terms, insurance misrepresentation is when you lie on your insurance application.  Instances of insurance misrepresentation include applying for insurance under a false identity, lying about a previous accident, or omitting certain pieces of information. While a little white lie may seem harmless, it’s important to understand that this type of fraud is a serious issue with very real consequences.  Here are some of the possible outcomes you will experience if you are accused of car insurance misrepresentation.

Possible Consequences

If you are accused of material misrepresentation, then the consequences you will receive will vary in severity depending on the seriousness of your lies.  Some of the possible outcomes include higher insurance rates, denial of an insurance claim, loss of insurance coverage, fines, and even prison time.  In many cases, insurance companies will discover that an applicant has lied but they will not reject their claim.  Normally, they will change the false information and simply raise the guilty applicant’s rates to rectify the issue.

Likelihood of Getting Caught

Material misrepresentation is relatively common and many perpetrators assume that they will never be caught.  However, it is a car insurance company’s job to verify all the information your supply on your application.  Insurance companies work with government organizations and law enforcement to investigate the various aspects of your application.  So, it’s common that lies are discovered during the underwriting process.  Even if you do not get caught during the underwriting process, this does not mean you are clear.  The insurance company may offer you a policy only to deny you coverage when you file a claim.  This is because the claims process requires the same investigation as the underwriting process, so any discrepancies that were missed initially are usually found at this point.

When you understand the consequences associated with car insurance misrepresentation and the likelihood that your lies will be uncovered, you can see why it’s important that you avoid this act of fraud.  Do you have further questions regarding your auto insurance in Astoria, New York?  Then don’t hesitate to contact the experts at 01 Insurance.  Our dedicated team is ready to assist you with all your coverage needs today.