The Downfalls of Lying When You Purchase Car Insurance
- Dan T. Matrafajlo
- Mon Nov 2017
- Car Insurance,
In case you were wondering, this is not an attempt to act as the moral police. On occasion, just about everyone feels it necessary to tell a little white lie. And, sometimes a bigger one. However, you need to be aware of some critical information. There could be significant downfalls associated with lying when you purchase car insurance.
According to an industry publication, New Jersey is no longer the most expensive automobile coverage in the country. However, it still ranks in the top fifteen percent. It’s no wonder that some car owners figure a small fib might save them some considerable expense.
It’s akin to lying on our taxes. An audit bringing up fraudulent documentation can cost your money than you ever imagined. Meanwhile, you won’t enjoy the consequences of being dishonest when you apply for car insurance.
Car Insurance Applications
It may be bold or fine print, but it’s there. Every single insurance policy application stresses the expectation that you tell the truth when applying for car insurance. After all, it’s how the insurance carrier determines your rates.
Generally speaking, people figure that they can get away with all kinds of falsehoods when it comes to applying for car insurance. They may conveniently fail to reveal the names of all household members. After all, adding a seventeen-year-old son to the application will inevitably increase the cost of automobile coverage. And, you can’t justify your explanation by saying he only really drives on occasion.
Then there are those that don’t feel it’s essential to include moving violations. However, since they do exist, there’s an expectation that you should reveal them. (However, an attorney who understands insurance law can let you know if you must still report downgraded admissions of guilt.)
It sounds trite, but honesty is really the best policy. A lie could be more than you bargained for when it comes down to dollars and sense.
Automobile Insurance Cancellations
The bottom line is that your insurance policy could be canceled for failing to tell the truth. As fate would have it, this will most surely occur precisely when you need to make a claim for payments. Imagine being a car accident that was not your fault. If your policy is terminated for lying, it will be as though you had no insurance at all.
Guess what? If you didn’t have automobile insurance at the time of the accident, you have no right to pursue a claim for personal injury. Meanwhile, you’ll also have trouble getting your medical bills paid. On the whole, you could be looking at far more money than you thought you would pay if you told the truth on your initial application
The Law and Misrepresentations
Case in point. A few years ago, the New Jersey State Appellate Division considered the issue of misrepresentation on an insurance application. Although the court’s decision was unpublished and only applied to the parties, it is worth read.
According to the facts represented in Geico v. Nelson, et al., Ernesto Martino and Jacqueline Nelson lived together as domestic partners for over sixteen years. They even had a child together.
Whether the omission was intentional or unintentional, when Ms. Nelson completed her insurance application, she failed to mention that Mr. Martino was a household member. In fact, she asked that her policy cover two vehicles and listed herself as the driver of both of them. There were also questions regarding traffic violations and Ms. Nelson replied in the negative.
The problem came when Mr. Martino was involved in a car crash while operating one of the listed vehicles. This brought the falsifications to the surface.
When the case was brought to court, Geico’s insurance underwriter offered confirmation that Ms. Nelson’s insurance premium was lower because she was the only one named as a driver and resident on the application. At that time, it was also submitted that Mr. Martino had prior traffic tickets for non-point offenses. This too, would have been a reason for an increase in insurance premiums.
In the end, it was determined that both misrepresentations were material in determining rates. Subsequently, the court agreed with Geico’s decision to void the insurance coverage. It is also important to Know about Protection Against Accidental Loss and Damage with car insurance so give that a read if you get the chance.
Don’t Let this Happen to You
There’s no question that the Law Offices of Beninato & Matrafaljo is well aware of the high cost of automobile insurance in New Jersey. Let us take a look at your insurance application and help you make the right choices to save money and protect your interests. Call us today.
Read the next blog: [You Really Need to Know This About Your Car Insurance Policy]. To read the previous post in this series: [Medical Bills: Why You Need to Immediately Review Your Auto Policy]