Honesty Gets You The Best Policy
Sometimes when shopping for car insurance, people think it’s acceptable to withhold facts or give incorrect information to their broker. Usually, the motive is simply to save money but sometimes drivers think they’ve paid high premiums in the past and haven’t made any claims, so their insurance company owes them something. The truth is that withholding information from your insurance company or providing false information is always going to be a bad idea in the long run. If you haven’t been honest with your broker about basic facts they need to know to issue you the right policy at the right premium, you’ll face serious consequences when the truth comes out, including:
1. Your insurance policy could be cancelled
If your policy is cancelled, you’ll likely have to pay more to get a new policy elsewhere. Policy cancellation for non-disclosure puts you in a high-risk category. Being in a high-risk insurance category automatically makes it harder for you to get new insurance.
2. Your claim will be denied
Let’s say you tell your insurance company that you don’t drive your car to work every day, but you really have a 50-kilometre commute each way. If you’re in an accident while on the commute, the company may deny your claim because you didn’t tell them the truth about your daily driving.
3. Your premiums will go up
Insurance companies provide policies and charge premiums based on the information you, ideally, truthfully provide. If you drive a lot or have had accidents in the past, this increases your risk for a future accident. If you didn’t disclose problems in the past and the company learns of them, your premiums will go up, because the company will have a more accurate picture of your potential risk.
4. You could be denied car insurance in the future
When you’re dishonest with your car insurance company and they discover it, whether it’s because of a claim you make or other means, it’s more serious than if you told the company from the beginning that you’d had an accident or tickets. The insurer is within its rights to deny your car insurance in the future.
5. You could face fines and penalties
You may have to pay money to your insurance company or receive a fine under your province’s insurance regulations. The amounts vary, but if a claim was paid under fraudulent circumstances, you could be held financially responsible for it. An insurance company can sue you to recover costs and damages under Canadian law.
6. You could face criminal penalties
A false insurance claim can lead to jail, substantial fines, and a permanent criminal record. Lying to your insurance company could seem like a good idea at the time, but in reality, it’s a form of insurance fraud. According to the Insurance Institute of Canada, customers pay 5 to 15% more for their auto insurance premiums than they would otherwise pay because of insurance fraud. Fraud costs Canadian taxpayers about $1.6 billion a year, and it could be higher according to some industry estimates.
At DPM Insurance Group, it’s our goal to find our clients the best possible rates given their individual driving situation and record, but we can’t do our job properly without accurate information. We’d much rather tell you’re your premiums are $12 a month more than you hoped rather than tell you you’re vehicle isn’t covered after an accident because you didn’t tell us about a previous DUI conviction or speeding ticket.