Sex, Lies and Car Insurance

Your car insurance is a contract. As with any contract, if you don't keep up your end of the bargain, the contract will be null and void. Despite the threat of loss of coverage, according to a PRNewswire release, it's estimated by the UK Motor Insurance Bureau that about 1 in 10 motorists lie to their insurer to get a cheaper quote for their policy. 

That's not good news for any of us. It's numbers like this that put insurance companies on the alert. It's numbers like this that keep insurance companies spending a lot of money on fraud detection. The more money that an insurer spends on fraud detection, the more money it is likely to charge in premiums. It's also more likely to deny claims -- and after the recent US experience with insurers denying Katrina claims whole hog -- I don't think insurers need any more reasons to deny claims.

One of the things that people lie about is the "sexiness" of their car. If your car is modified from the standard model -- bigger engine, racing spoiler, fancy (and expensive) paint job -- that either you or the previous owner have made, you must declare this to your insurer. Not doing so means that your sexy wheels could be denied coverage if you happen to get into an accident. It's that simple.

It's not just your car that you need to tell the whole truth about; you also need to tell the whole truth about you and your driving record. If your insurer discovers driving convictions for tickets or other traffic infractions and you deliberately haven't disclosed them, you could again find yourself without coverage.

Even a small lie -- like how far you live from work or whether you use the car to drive to your job -- could land you in some serious hot water. If you say that your car is only for "pleasure driving" and you have an accident on the way to the office, your insurer will be asking a lot of questions. You could find your claim denied and your policy cancelled.

If you want your car claim paid quickly and with minimal fuss, check out our tips on how to prepare for the worst. But remember, these tricks only work to help you out if you've told the truth to your insurer in the first place!

So think carefully when you get your next insurance quote. Make sure your insurer knows everything they should. Not only will your mother be proud, you won't have to worry if your insurer will cover you when you need it.

Monique L. Attinger 

Posted by on May 4,2007 at 2:13 PM

A very good point... Once you've told your insurer the right information, it's critical to be sure that your insurer has the right information on file. Not every mistake is the fault of the policy holder!

Posted by Vlad on May 4,2007 at 2:06 PM

You're right: It's vital to give your auto insurance provider the most accurate information possible. The smallest inacurracy - even an unintentional one - can give them the right to deny you any insurance payout if you ever suffer a loss.

At the same time, the insurance company itself may have incorrect information about you - human error happens, and they may have inaccurate details on your profile - e.g. the wrong model or make of your car. Such errors can lead to higher auto insurance rates than you deserve.

Ultimately, it's your responsibility to review the information your insurance provider has on you to make sure all is correct.

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