What is Car Insurance Misrepresentation?

Learn more about car insurance misrepresentation.

Car insurance misrepresentation, also known as material misrepresentation, is a type of insurance fraud. You are committing car insurance misrepresentation any time you lie on your auto insurance application. Examples of car insurance misrepresentation include applying for insurance under a false identity, lying about a previous car accident, or omitting important pieces of information. While a little lie might seem harmless at the time, it’s important to understand just how serious this type of fraud can be. Here’s what you should know about the consequences of car insurance misrepresentation.

Consequences

If you are guilty of car insurance misrepresentation, you face a variety of consequences that range in severity. Some of the possible outcomes include higher insurance rates, denial of an insurance claim, loss of insurance coverage, fines, and even prison time.

Chances of Being Caught

Insurance misrepresentation is relatively common, and many perpetrators assume they will never be caught. However, it is a car insurance company’s job to check all the information you supply on your application. They have access to resources that allow them to verify the information you give. It’s generally easy for insurers to catch misrepresentations during the underwriting process. Even if you are not caught at this juncture, this does not mean you are in the clear. The insurance company might issue you a policy only to discover the fraud while processing a claim. This is because the claims process requires the same investigation as the underwriting process. Any discrepancies they might have missed initially are often caught down the line. If this is the case for you, expect your claims to be denied.

When you realize what’s at stake, you can see why it’s so important to avoid committing car insurance misrepresentation.  Do you have further questions regarding your car insurance?  Contact the experts at Weaver & Associates in Arcadia, California.  We are ready to assist you with your insurance needs today.