Insurance can get expensive, and some people might find it tempting to lie in order to get reduced payments or even to get money for something that they weren’t actually insured for. You might conceal drink driving incidents or speeding tickets in order to get lower car insurance payments, for example. Or you might say that you were driving the car when you got into an accident, rather than your friend who happens not to be insured. Or you might even set your car on fire because you can’t afford the payments, and then claim it as an accident to get the insurance money. Lying to your insurance company is a bad, bad idea. Want to know why?
You Will Be Found Out
Basically insurance works on the principle of transferred risk. If your house burnt down tomorrow, you might not have the money to rebuild it. So, in exchange for a small monthly payment, your insurance company assumes responsibility for the risk of this happening, and promises to repay you the cost of your house should anything happen. Companies do not take this risk on lightly. Legally, companies have the right to investigate any claim they see as suspicious. And they will. And they are experts at it. There is no plan cunning enough that they haven’t seen it before. For something as simple as lying about speeding tickets, your company will find out as soon as they pull your driving record (which they’re allowed to do). Insurance investigators are very good at their jobs, don’t think that you won’t be caught.
You Won’t Get Your Money
The risk of lying on your application is that once you’re found out, your insurance company is no longer required to pay your claim. The same goes for lying about how something happens. If the company finds out that it wasn’t really you driving the crashed car they no longer have to pay out. This is why insurance investigators are so good at their jobs: insurance companies don’t want to pay out money, and will go to great lengths in order not to do so.
You’ll Be Blacklisted
When your insurance company discovers fraud of any kind they are allowed to decide whether or not they will keep you as a customer. Unsuprisingly, they generally choose not to keep clients who have defrauded them. This might not seem like a big deal until you realise that your name will then be blacklisted, for anything up to three years, depending on where you live. This means that you will be unable to get any insurance at all from any major insurance company.
You Can Be Punished
Insurance fraud is a crime. Depending on how big your claim was, and whether or not you have received any money from your claim, your insurance company can decide whether or not to prosecute you for defrauding them. Yes, you can go to court. Yes, you can pay huge fines. And yes, you can go to prison. Insurance fraud is not a joke, and is taken very seriously by the courts.
It can be tempting to fudge the truth a little in order to save a bit of money. And, after all, it seems like a victimless crime, no one gets hurt other than a big insurance company, and they can handle losing a little cash, right? But when it comes down to it, the risk just simply isn’t worth it. Tell the truth. If you lie to your insurance company, the probability is that you’ll come to regret it.
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