What you risk lying to try and get cheaper auto insurance
If you’ve ever thought of lying to your insurer to get a cheaper auto insurance rate here’s a piece of advice ‑ don’t.
An Alberta man recently admitted to a Canadian media outlet that he changed his gender identity to female on his application and driver’s licence in order to get cheaper auto insurance. Insurers use gender and other things as risk factors to determine rates and are permitted to do so by regulators.
Today, with more and more people going online to get a car insurance quote, they never see an insurance agent in person. Some may be tempted to leave out important information such as disclosing tickets, accidents, whether you drive to work and even gender in the hopes of getting a better rate.
In every case your insurer has the right to cancel the policy if you have made fraudulent claims or misrepresented yourself. It's important to know the serious consequences of lying on your application:
- Your application can be rejected. Just because you fill out the form, companies don’t just take your word for it. When an insurer gets information about your driving record or credit score and it doesn’t match what’s on your application, you can be refused insurance. And, even if they do insure you, you’ll likely pay higher rates because you will be seen as a greater risk. If the discrepancies aren’t caught right away but discovered later, your policy can be terminated.
- Your claim could be denied. When you have an accident or attempt to make a claim they may also review your application, especially if it’s a first claim. If you had a car accident or your car was stolen, you could be out thousands of dollars when your claim is denied.
- You could be sued or face charges. If an insurer does pay out a claim but finds out later that you lied on your application, they could cancel your policy and sue you to recover the money. They could even pursue criminal charges.
Lying to your insurance company breaks the "good faith" agreement you make with the company, and exposes it to risk it doesn't know it's facing.
Cutting corners on your car (or home insurance) may save you money in the short term – before it’s discovered – but, in reality, it’s also costing fellow Canadians millions a year in added insurance premiums.
Almost everyone who needs insurance can get it whether they have bad credit or a poor driving record. But when you lie, you are leaving yourself without protection when you really need it.