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What is Car Insurance Misrepresentation?

Learn more about car insurance misrepresentation.

Car insurance misrepresentation, also known as material misrepresentation, is a type of insurance fraud. Essentially, you are committing car insurance misrepresentation any time you lie on your auto insurance application. Instances of car insurance misrepresentation include applying for insurance under a false identity, lying about a previous car accident, or omitting certain important pieces of information. While a little lie might seem harmless, it’s important to understand just how serious insurance misrepresentation can be. Here’s what you need to know about this type of insurance fraud.

Consequences

If you are accused of insurance misrepresentation, then you face a variety of consequences that range in severity. Some of the possible outcomes include higher insurance rates, denial of an insurance claim, loss of insurance coverage, fines, and even prison time.

Likelihood of Being Caught

Insurance misrepresentation is relatively common and many perpetrators assume that they will never be caught. However, it is a car insurance company’s job to verify all the information you supply on your application. Insurance companies work with government agencies and law enforcement to investigate the details of your application. Additionally, they have access to various resources that allow them to fact check you. So, it’s quite easy for insurers to catch lies during the underwriting process. Even if you are not caught during this stage, this does not mean that you are in the clear. The insurance company might issue you a policy, only to discover your fraud when you file a claim. This is because the claims process requires the same investigation as the underwriting process. So, any discrepancies they might have missed the first time around are normally caught at this juncture. If this is the case for you, then you can expect your claim to be denied.

When you understand just how serious car insurance misrepresentation is, you can see why it is so important to avoid this act of insurance fraud.  Do you have further questions regarding your car insurance?  Then contact us at The Schwab Agency in Colleyville, Texas.   Our dedicated team is ready to assist you with all your insurance needs.

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