What Is Misrepresentation in Car Insurance?

Last Updated on October 8, 2020

When shopping for car insurance, you may hear the term ‘misrepresentation’ thrown around without fully understanding what it means. Misrepresentation is a type of car insurance fraud, and manyp people commit it without a full understanding of the potential consequences. It’s important to understand the different types of misrepresentation and how serious it can be before you go shopping for a policy.

What Is Car Insurance Misrepresentation?

In the context of car insurance, misrepresentation happens at any time you aren’t fully honest with a car insurance company. The types of car insurance misrepresentation can range widely in severity, from a small omission on your insurance application to applying for car insurance under a false identity. This type of misrepresentation is sometimes referred to as material misrepresentation.

Examples of Car Insurance Misrepresentation

What Is Misrepresentation in Car Insurance?The most common example of car insurance misrepresentation is omitting an accident or another driving penalty to make it appear that you have a clean driving record. Many people will conveniently leave their accident off of their application if they think it will help get them better rates. It’s also common for drivers to not report speeding tickets or even DUIs in an attempt to get a better rate on their insurance policy.

It’s also common for drivers to misrepresent personal details because they believe it will help them get a slightly lower rate. For example, it’s common for younger drivers to receive higher rates than older drivers because of their lack of experience. It’s also very common for married couples to receive lower rates than single drivers. Many people will misrepresent their age, marital status, or location in an attempt to get a better rate. Another very common form of misrepresentation is lying about who the primary driver is on a policy. For example, if one partner in a married couple has a history of driving accidents, but the other partner has a clean record, they may try to have that partner listed as the primary driver for both cars.

What Are the Consequences for Car Insurance Misrepresentation?

The consequences of car insurance misrepresentation can vary widely depending on the severity of the circumstances. For example, a small omission on your car insurance application is a relatively small form of misrepresentation, so you may only end up paying higher monthly insurance premiums. However, for more serious forms of misrepresentation, you could end up paying expensive fines or even losing your car insurance coverage altogether. In the most serious cases, you could even serve jail time. This could happen if you apply for car insurance under a fake identity.

Many people believe they won’t get caught when they misrepresent themselves on their car insurance, thinking of it as just a small white lie. However, car insurance companies will likely catch any errors in your application fairly quickly. They’ll go through and verify the details on your application by looking at your government driving record as well as your history with other insurance companies. If you omit an accident you were in from your insurance application, your insurer will catch it when they go to verify your records. Even if you initially get away with misrepresentation, it may come out later on when you go to renew your policy or apply for a different type of coverage. It’s always best to be honest so you don’t risk any further penalties down the road. Insurance companies will go to great lengths to find the truth if they think you’ve been lying – they may check local security footage or even go through your social media posts to determine if you’re telling the truth. Since there’s so much information stored online today, it’s easier than ever for insurance companies to catch you, which makes lying on your application very risky.

What Happens If I Accidentally Misrepresent Myself?

Unfortunately, accidental misrepresentation happens quite often. For example, it’s normal to forget the number of years you’ve had an insurance policy or small details of your car. Your car insurance company will probably catch these errors when processing your application. However, in the vast majority of cases, it will be understood as accidental misrepresentation and your car insurance company will not take steps to prosecute you.

To prevent accidental misrepresentation, make sure to gather up as much information as you can regarding your car and your driving history before applying for the insurance. This will prevent you from having to guess as you’re answering the questions, which is what often leads to misrepresentation. If you believe you may have accidentally made an error when applying for car insurance or setting up your policy, contact the insurance company to correct it. This will prevent any confusion as you’re setting up your policy.

It can be very tempting to lie in your car insurance application. However, even if you don’t get caught right away, your car insurance company could end up exposing you down the road. This could result in much higher rates or even an inability to get the car insurance you need, so it’s not worth it. Instead, look for car insurance companies that offer affordable rates and discounts. The best way to find a great deal on car insurance is to get quotes from many different agencies and compare them. Every company has its own model for setting insurance prices, so you might be surprised by who is able to offer you the lowest insurance rates.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
Back to Top