Insurance is a contract with your insurance company to cover the financial losses for an unexpected future event. It isn’t always certain that you will be required to make a claim for your vehicle. Unlike any ordinary purchase of a tangible item, you do not get a service in return when you pay the premium. The promise is for an uncertain future event.
Many times in order to save a handful of premium, people tend to lie or conceal crucial information about their vehicle or other vital details to the insurer. While it may help to lower your premiums in the short run, there always lies a risk that your claim application can get rejected.
What are some of the common lies resorted by people?
Here are some of the frequent lies told when it comes to purchasing car insurance online or offline.
#1 Condition of the vehicle
There are various cases when people tend to falsify the condition of their car, any significant issues or even conceal the incidents of an accident or major damages. This false information, if identified by the insurer, can lead to rejection of your claim too.
#2 Usage of the vehicle
Some individuals lie about the car’s usage. Private vehicles are required to be insured using private insurance policies, whereas plans for commercial vehicles are different. People tend to falsify the usage of their car, where a private car with a private insurance policy is used for commercial purposes.
#3 Claim history
Claim history is crucial to determine the premium during car insurance renewal online or offline. For a comprehensive policy, the insurance company offers a no-claim bonus or NCB, which is dependent on the claim history of the previous policy tenure. Often people misrepresent the claim history to get the maximum benefits at renewal.
What are the reasons people make false representation to the insurance companies?
Some people lie to their insurer knowingly whereas some others unknowingly. Whatever be the reason, the consequences are the same, i.e. rejection of their claim. Here are some reasons that are the most common ones why misrepresentations are made –
There are two types of policies that you can buy, comprehensive and third party car insurance. While not much can be changed when it comes to third-party policies, a comprehensive plan with its add-ons can sometimes prove to be expensive. To save premium on these comprehensive plans, people often falsify or conceal information.
Higher settlement at the time of claim
Higher settlement at the time of claim is one of the more common reasons why people mislead their insurers. Some individuals state that older damage has occurred during the policy tenure and make a claim for it. For example, damage taken place when a liability-only policy covered the car may be falsified and claimed when the person avails a comprehensive insurance plan. This way, a few individuals take undue advantage.
Obtain insurance cover despite ineligibility
Some people end up manipulating the information that is declared to meet a particular criterion. It mostly includes criteria for availing add-ons that are not otherwise available for older cars.
To conclude, do not mislead your insurer. It can not only lead to claim rejection but also have legal consequences.