If you own a car, you need to have auto insurance. In an effort to save money, some drivers might lie on their car insurance applications. Surprisingly, more people do this than you might think. According to a recent survey from Cars.com, about one-third of drivers lie on their car insurance applications. So why are so many drivers stretching the truth?
In most cases, drivers lie about the average number of miles they drive, where they keep their car, accident history and other personal factors insurance companies use to determine your risk. With so many drivers lying about their driving behaviors and history, it appears that the risks of fraudulent applications are unknown.
What false information can do
When you lie to your insurance company, you could be setting yourself up for fraud later on. For example, if you lie on your application that you park your car in an indoor lot every night and your car gets burglarized on the street, the claim you file could signal fraud because you misled the insurance company to begin with.
However, it is possible to get major savings by falsifying information on your auto insurance application - though you still should never do it. In many cases, your insurance company will be able to catch you. According to Cars.com, 40 percent of those who lied on their application were caught. In many cases, their claims were denied and they faced penalties in the form of higher premiums. When you lie, you also run the risk that your insurance company will simply cancel your policy. This was true for about 25 percent of survey respondents who were caught.
If you are looking for ways to save on your car insurance rate, there are ways to do it other than lying about your vehicle or history. Instead, look for discounts or consider bundling your auto and homeowners insurance policies from the same company.