3 Reasons You Shouldn’t Lie to Your Car Insurance Company

Buying car insurance is expensive, even if you’re over the age of 30 and have never had an accident or even a ticket. Even with good driver discounts, memberships in automobile clubs, and other membership savings, insurance can take a bite out of a budget.  And for those who have blemishes on their driving record, credit report or have to insure high-risk drivers such as teens, the cost can be astronomical.

This is why some look for ways to shave their premiums down. Stating they only drive 12,000 miles a year, when in actuality, they drive 15,000. Reporting their car is garage-kept, when it actually stays parked in front of the house. Even “forgetting” to include the 17-year-old new driver on the insurance policy – these are ways people try to save money on auto insurance.

But it’s a bad idea, folks. And here are a few reasons why.

1. Insurance companies always find out. If you take your car in for an inspection, and you your odometer reading doesn’t match the mileage you gave your insurance company, they will know you lied. For example, if your car has 100,000 miles on it, and you told your insurance company you only drive 12,000 miles a year, that’s an average of 1,000 miles a month. So, let’s say in June, you take your car in for its annual inspection. The odometer reads, 107,500. If you were really only driving 1,000 miles a month, the reading would be 106,000, give or take a few miles. That difference of 1,500 miles could be enough to trigger a further inspection of your insurance policy, and if it found that you lied about the mileage, the insurance company can cancel your policy.

2. Payback. Let’s say you “forgot,” and didn’t add your teenage daughter to your insurance policy. And let’s say your teenage daughter is answering a text, loses control of the car, and sideswipes five parked cars. You now have two issues: an uninsured driver was driving your car, which means your insurance company does not have to pay to repair your vehicle. But the bigger issue is that because she lives in your house and you didn’t include her on your auto insurance, the insurance company does not have to pay to repair the cars she hit either, and is also well within their rights to cancel your policy.

3. You don’t save anything. One of the reasons insurance premiums are so high, are because un- and under-insured drivers cost insurance companies billions of dollars each year. Auto insurance companies lost $15.9 billion in 2008 due to uninsured or improperly insured drivers. Insurance companies have to recoup those losses from somewhere, so they raise rates for drivers. So, by lying, you are just causing the rate that you are trying to pay as little of as possible, to increase. Which means you try to find something else to lie about to lower the rate.  The lies create a vicious cycle.

So, the next time you’re tempted to lie on your policy — think again. It’s not worth it.

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