Consequences of lying on your car insurance application

NEVER lie on your car insurance application. It’s just that simple. But if you still need reasons for why you shouldn’t, here they are.

Some people are under the mistaken impression that lying on their online car insurance application to get cheaper rates can do no harm. Nothing could be further from the truth. For starters, if you think your lie will never be found, think again. What’s worse, there can be a heavy price to pay. Some of the major consequences of lying on your car insurance application are:

Your policy could get cancelled

“Forgetting” to provide key details (such as not informing the insurer about prior claims, driving offences or existing damages to your car etc) on your application form could be considered non-disclosure or misrepresentation by the company, which could result in immediate cancellation of your policy. Your insurance contract will become void immediately. As a result this, non-disclosure cancellations stay on your record for a good three years, which means if you wish to buy insurance, you’re going to have to buy it through high-risk insurance providers. Needless to say, this might mean considerably higher premiums.

Rejecting claims

If and when your lie gets found during investigation at the time of an accident, your insurance provider could very well reject your claim and cancel your policy. What’s worse is that if you’ve had a major crash, you might be out of thousands of dollars all because of a lie.

You could be denied car insurance coverage in future

As mentioned earlier, non-disclosure cancellations stay on your policy for 3 years. Because of this insurance companies might be vary of granting policies to you in future. And if they do, it might be at a very high price.

You might be required to pay heavy fines

If found guilty under the Insurance Act, you could be heavily fined up to $100, 000 for the first offence and an additional $200, 000 for other offences that might be discovered.

Legal action in case of fraud

IF the insurer alleges that you are guilty of fraud, it is needed to prove the allegation. The matter may be referred to the police as well. Under the Criminal Code of Canada, people could face up to 10 years of jail time if found guilty of fraud.

Lying about important details on your car insurance application is never a good idea. It’s best to be upfront and honest; keep the insurance company informed about life changes as soon as they happen. You’ll find that lying to get a few discounts is really not worth it. And honesty really is the best way to go!

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