Lying about Accidents

If you cause an accident, you need to be honest with the insurance company about what happened—even if you were in an accident with no other drivers (for example, you hit an inanimate object). In such a situation, you have the opportunity to lie to the insurance company and tell them that you were involved in a hit-and-run and that the other driver ran off. Do not do this. Remember, you’re paying the insurance company to financially cover you in the event that you cause a car crash due to negligence. Lying about an accident, regardless of whether or not there were other drivers involved, can have serious consequences. One of the provisions in your insurance policy likely requires you to cooperate with any investigation into a claim. Lying is not cooperating. Not only can your insurance drop you and refuse to sell insurance to you, other companies may do the same if they find out about your history of lying (which they will be able to do). Lastly, there can be criminal consequences for lying to the insurance company, (like insurance fraud—which can result in jail time).

Not Insuring Teenagers

If your teenager drives the car, they need to be on your insurance policy. Typically, insurance follows the car, not the driver. So, if your uninsured friend wrecks your car while borrowing it, there’s a chance that your insurance would still cover the damages, as it’s the car that’s insured, not the driver. However, you have to inform the insurance company that you gave your friend permission to drive the vehicle. Your friend becomes known as a “permissive driver” and your insurance would likely cover them. However, this does not mean that insurance companies will do that in all circumstances. Remember, when insurance companies deny claims, they get to keep more money. If your teenager drives your car and wrecks it, the insurance company can deny your claim, reasoning that they were not aware that your teenager was driving your car and did not factor the risk into your premiums. Don’t think you can get away with not insuring them simply because they don’t drive the car regularly. If you have other people living in your house who drive your car, regardless of whether they’re your teenage children or not, they should be on your insurance if they regularly drive your car, else the insurance company may deny coverage in the event of an accident

Registering Elsewhere

Cars have to be registered and insured in the state that they’re primarily driven or parked in. So, for example, if you’re moving from Montana to Arizona, but you know that insurance in Arizona is more expensive than it is in Montana, you can’t just elect to insure your car in Montana. When insurance in one state is more expensive than insurance in another state, it’s not uncommon for people to attempt to get around this—especially if they have family back home willing to help them out with plates and registration. This way, they can cash in on cheaper insurance by pretending to be a resident of a different state. Depending on where you’re located, this could be considered to be fraud and have criminal consequences. Best case scenario is that, in the event of an accident, the insurance company decides to deny your claim due to the fact you’ve more or less lied about where you live and where you’re primarily driving the car. The worst-case scenario is that you end up in jail for fraud. The consequences will vary depending on where you live, but it’s not worth the risk. If you live on the border of two states, and you’re driving 50% in Utah and 50% in Idaho, for example, the insurance company is going to look at where the car is stored or parked. So if you live in Utah, the car will need Utah insurance. There are exceptions for college students who attend school out of state; particularly if their parents on the vehicles, but remembers some states require you to register your vehicle within 90 days of arriving in the state, regardless of if you intend to consider yourself a “resident” or not.

Lying about Purpose

When you’re trying to purchase insurance, you need to be honest about how often you’re driving the car, when you’re driving the car, and what the car is used for. The fewer miles you drive, the more likely it is that you’ll have lower premiums due to the fact there’s a lower chance of you being involved in a car wreck. However, if you lie about how many miles you drive per year, and then you get into a car wreck, the insurance company may investigate whether or not you were honest when you claimed that you only drive 5,000 miles per year. If they find out you lied, they may deny coverage. When you’re filling out an insurance application, you need to be honest about what the car is used for. If you’re using the car for a service such as Uber or Instacart, you may need extra or separate insurance. If you cause a wreck while driving for Uber, and your insurance company wasn’t aware that you were driving for Uber with the car, they will absolutely deny your claim.

Going Without

Want to cut your insurance premiums by 100%? Just go without insurance! After all, you can’t get in they can’t sue you if you don’t have any money, right? BAD IDEA! While a personal injury attorney is unlikely to personally come after someone who doesn’t have any assets, the other party’s insurance company will almost certainly pursue a claim against you if you cause a car crash while driving without insurance and the victim’s UIM policy covers the cost. When this happens, you may have to negotiate a payment plan or even have your wages garnished. Do not drive without insurance. Furthermore, you may also face criminal consequences for driving without insurance. Not only could you be fined, but your license may also be revoked. Depending on where you live, if you receive several citations failing to have insurance, your state may apply “mandatory coverage” to comply with state minimums to your vehicle and garnish your wages to cover the cost of that as well.

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