Many times, when people fill out an insurance application, they will intentionally omit important details to try to get a better quote. The insurance company might not discover the discrepancies that day, but they will when you have to file a claim. Your claim may be denied, and they may even cancel your policy.
Statistics show insurance fraud is a growing problem in the USA. More insurance fraud means all policyholders have to pay more, so it affects all of us when others hide information from their policy.
Here are the most common mistakes policyholders make when they are completing their applications for auto insurance:
1. Not mentioning recent tickets or accidents.
In many scenarios, a policyholder causes an accident, and the insurance company raises their rates. The policyholder is upset about the rate increase, and they try to get a lower insurance rate with someone else. They don’t mention a recent speeding ticket or other driving infraction, hoping the new insurance company doesn’t find out.
A quick DMV report reveals all recent infractions and accidents, so there’s not anything you can do to hide your driving history.
2. Not mentioning all eligible drivers in the household.
The most common scenario here is when there is a driver in the household who has many driving infractions on their record, but their name is not on the policy. Parents will try not to list children on their policy to save money. If someone not listed on the policy wrecks the vehicle, it will cause your rates to skyrocket, and your policy might even get canceled.
3. Not mentioning business travel.
Do you have to travel for your job? If you fail to mention this on your application, your insurance claim may be denied if you are in an accident. Many drivers working Lyft, Uber, Doordash, GrubHub, or other driving platforms forget to put this on their insurance policy. Most insurance companies will deny the claim if you don’t purchase commercial insurance.
4. Giving the wrong miles driven.
Do you have a long commute? This can have an impact on your rates, and you should report this truthfully. When you have to file a claim, the insurance adjuster will report your real mileage, and it will impact your rates if it is not consistent with what has been previously been reported.
5. Forgetting to update policy info
If you forget to report you have a new job with a longer commute, or you forget to add your teenage son or daughter to your policy, this will have a major impact on your policy if you get into an accident. You may also lose major discounts and have to pay much more when your insurance company updates your information.
6. Not listing the parking location
It is important for the insurance company to know if you have to park your car on the street. This increases your risk of your vehicle being side-swiped, and they might deny your claim if you have to file a claim for this. You can also get a discount if your vehicle is parked in the garage.
If you have been looking for a new insurance provider, contact Sanford Insurance today to request a quote.