Serious omissions could cause your insurer to drop you– or worse
When it comes to insurance, honesty is the best policy– but that doesn’t stop thousands of Americans each year from being dishonest with their insurers to save money upfront. Whether it’s slightly altering their payroll and employee information when applying for business insurance, or failing to mention a previous accident to a new auto insurer, mistruths among the insured are often as common as insurance policies themselves– but they shouldn’t be.
While fibbing might reduce your insurance premiums now, it could come back to bite you later– especially if what you told your insurance company doesn’t quite align with the truth. Even if you’ve covered your tracks well, there’s always a chance your insurance company might discover your dishonesty– which can often have seriously annoying, expensive, and even life-altering consequences. Here’s exactly why being dishonest with your insurance agent is bad and how to make sure you don’t ‘accidentally’ omit vital information that your insurer needs to know.
Being dishonest or omitting important information could result in your claim being denied
You probably don’t buy insurance policies just for fun– instead, you buy them for the financial protection they can provide if something goes wrong with you, your home, your car, or your business (among other things.) That protection usually comes in the form of a payout after the insured individual files a claim with their insurance company. But if you haven’t been honest with your insurance agent, that claim could easily be denied.
In many cases, especially those involving a large sum of money, insurance companies will send out investigators to ensure that the information in your claim is accurate– and if they find that it isn’t, you could be in trouble. Insurance investigators will often consider things including:
• The site or scene of an accident involving a vehicle, person, building, home, or something else that has been insured
• The insured’s online activity, including social media posts, postings on public blogs, forums, and websites
• The insured’s daily activities, home, and/or business
Any evidence of dishonesty in any of these areas (i.e. a social media post directly contradicts what you told your insurance company) could easily lead to the firm denying your claim. Even if part of what you told the firm is true and you do deserve some amount of damages, the fact that you lied about part of your claim could leave you without any insurance payout at all.
Serious or repeated omissions or lies could lead your insurer to void your policy
While having your claim denied can be annoying and expensive, it’s far from the worst thing that can happen due to dishonesty on the part of the insured. If your omission, half-truth, or lie is especially egregious, or it happens on more than one occasion, your insurance company could void your policy– dropping you all together. This could leave you uninsured– and due to your dishonesty, it may make it much more difficult and expensive to find a new insurance policy, especially if your new insurance company somehow finds out about your past indiscretions.
Insurance companies sometimes take legal action when a customer’s “omissions” becomes fraud
In general, having your insurance policy voided is considerably worse than having a claim denied, but lying to your insurance company can have even more serious consequences– especially if the lie has been found after you’ve received an insurance payout. In some cases, your insurer could take you to court over any misrepresentations you’ve made– meaning you’ll often have to pay significant legal fees, and court costs in addition to returning some or all of your insurance payout (if you lose). In certain situations, you could even be charged with insurance fraud– a crime that can carry serious fines and even jail time– and nobody wants that.
Even accidental omissions can have serious, unintended consequences
When it comes to working with your insurance company, providing accurate information at all times is an essential part of your responsibility as a policyholder. Even if you didn’t intend to mislead your insurer, if you unintentionally give them significantly inaccurate information, you could still be dropped, denied a payout, or taken to court (though you’d likely avoid any criminal penalties). Bottom line: being honest with your insurer is the best way to help yourself. Being dishonest is simply a recipe for disaster.
To learn more about how to make sure your insurance company is working for you– and how the right insurance can help save you money and protect you from financial risks, contact Avante Insurance today for a free consultation.