What Is Car Insurance Misrepresentation
Car insurance fraud comes under multiple forms. From staged accidents and exaggerated repair costs to lying in official documents. Providing false or misleading information is known as misrepresentation. And all insurance companies punish this act severely. Find out more about car insurance representations and avoid doing it. The best alternative to lying in order to get cheaper premiums is to shop online. Use online auto quotes to compare prices and select an affordable insurance plan.
The most common forms of misrepresentation include:
Missing drivers: This occurs when a policyholder fails to tell the insurer that other drivers regularly use the vehicle. For example, if you have a teen who has recently got driver’s license and drives your car, but you do not add it to your policy, then you commit a fraud. And there are many parents who do that, fearing that adding a teen driver will skyrocket the insurance costs.
Under-reported mileage: This is a common misrepresentation, used for those who want to get lower premiums. Keep in mind that an under-reported mileage may look suspicious and determine the insurer to ask for odometer readings.
Location lies: When a policyholder uses a different address to register and insure a car, they are committing auto insurance fraud. Usually, registering/insuring a vehicle in a rural area results in lower rates than insuring it in a city. For example, if you say your car is “garaged” at your parents’ home in the suburbs, but you actually live in the city, you are committing insurance fraud.
Grade faking: This occurs when a parent or student lies about good grades to qualify for a good-student insurance discount. Again, this lie can be easily discovered, with a simple report card which will be asked by the insurer.
Fronting: This is when a driver insures another person’s vehicle under their name in order to help the driver avoid high premiums. For example, auto insurance for teenagers is expensive, and a parent may be tempted to purchase the policy under his or her name, which will likely be cheaper than if the teenager had obtained coverage individually. This is illegal and could end up being costlier than the increased premium.
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