Most motorists would know that providing false information while buying vehicle insurance would get them into trouble in the future. However, it may be tempting to twist the facts a bit or in some cases a lot to get cheap quotes. Auto insurers can check on the accuracy of the details provided to them but they would in most cases trust customers.
It costs time and money to investigate every applicant. Besides only few people would lie on proposal forms. Not checking at the time of application does not take away their rights to do so whenever they choose. Generally these things would come up at times you want to hide them the most, when you have a claim. Here are a few other automobile insurance facts you should know to get the most out of a policy.
Mileage Driven: is an area carriers suffer the most. They lose nearly two billion dollars every year because policyholders underestimate the mileage they cover every year. These days some companies are working with specialist firms to estimate the possible miles you may drive. They look at the details provided and suggest a likely number for yearly distance.
However, most of them still rely on the applicants to tell them the truth. The higher you estimate the higher the premium will be. The fact is that the chances of involving in accidents would increase the longer you stay on the roads. You may not be able to accurately guess the mileage you will drive within the next year but you must have a good idea.
At certain points the effect of these numbers can be much higher. For example, driving under 5000 miles can qualify you for large discounts. In the same way keeping it under 30,000 can avoid paying higher bracket car insurance rates.
Home Address: is where you reside most of the time. People drive cars in the areas they live. They go to work and pick up children in that area every day. This address must be where you are residing most of the year and not a second home you have in the countryside. When you provide misleading information you may pay a lot less premium but would it be fair to the insurer?
Also, it may come back and bite you. Companies may easily become suspicious when you have an accident far away from home and start searching. There are a lot of paper trails in relation to home address that it won’t be hard for them to work out the truth. They can ask neighbors, check where you work and check utility usage in a city home and where you registered the vehicle.
The price differences can be over thousand dollars in some cases. Carriers can do a few things depending on the situation. They can void the policy from the inception date. This will have the effect as if it never existed. They may refuse to pay a claim. Or they may demand the difference from the start. In some cases they may start legal action against the people being accused of a fraud.
Vehicle Usage: is another area people may not be honest enough. Using a private automobile for business purposes require additional coverage and premiums in most cases. It would be safer to pay the little difference and get insured properly. By the way, you are not allowed to carry passengers or goods for a fee with a private policy. If you give employees lifts for free of charge this would probably be considered carrying passenger for a financial gain and not allowed again.
There are many other small and large lies told to get or keep low rates. When you sign up you promise to tell the truth to the best of your knowledge. It may be best to keep this promise for the sake of keeping the cover in the long run.