What happens when you lie to your insurance company about where you live? What kinds of penalties or consequences will you face? When does lying to your insurance company become fraud? Today, we’re explaining everything you need to know about what your insurance company needs to know about where you live.
Your Claim Could Be Denied
Let’s make one thing clear: lying to your insurance company about where you live can easily cause your claim to be denied.
Your insurance company is a for-profit business. Their goal is to make money. If there’s a valid reason to deny your claim – like lying about your address – then your insurance company will use that reason to deny your claim.
Your location plays a critical role in car insurance premiums. Insurance companies use your location, driving history, demographic data, and other factors to calculate accurate insurance premiums.
Your Location Determines Insurance Premiums
Your location plays a crucial role in how much you pay for insurance premiums. When you lie about your address, your insurance company cannot charge accurate rates.
Different ZIP codes can have vastly different insurance premiums as well. if you live in an unsafe neighborhood, for example, then your insurance company might charge higher premiums. Your car is more likely to be vandalized or broken into.
Furthermore, some cities or ZIP codes have higher accident rates than in other areas. A driver in a big city may be more likely to make a claim than a driver living in a small town.
All of these location-based factors impact risk. Your insurance company uses these factors to determine how much you pay for car insurance.
When you lie about your location, it means your insurance company isn’t charging accurate premiums for car insurance. You might be paying too little for car insurance based on your actual risk, for example.
Some Insurers Will Spot Location Mistakes Early On
When you apply for car insurance, your insurance company will check your details against a centralized database of claims and applications. This allows your insurance company to see any previous claims you’ve made.
Sometimes, drivers are lucky: the insurance company will spot a mistake early in your application. You might have inadvertently typed an old address into your car insurance application form.
Or, the insurance company might contact you to confirm your current address – especially if you recently graduated or moved.
Generally, however, it’s up to you to ensure the address on your car insurance is your real address.
What Happens If I Live in Multiple Places or States?
What happens if your living situation is complicated? Which location do you use with your car insurance?
Your insurance company wants to know the address where your car is parked most nights of the week.
If you live in the city but visit your parents on weekends, then you cannot use your parents’ address to get cheaper insurance rates.
If you do get into an accident and make a claim, then the car insurance company will investigate your claim to ensure your location is accurate. The company might check to make sure your car is legitimately parked at a certain address most nights of the week, for example.
Lying About Your Location is Fraud
Lying about your location on a car insurance application is fraud.
Sometimes, it’s a minor form of fraud. You typed the wrong address into the application form, for example. In other cases, it’s a more significant form of fraud: you’re using your parents’ address to get cheaper insurance premiums, for example, or claiming you live in one state when you actually live in another.
If you get into an accident with inaccurate location information on your car insurance, then your claim could be totally denied. Your insurance company considers this a form of fraud.
Reasons to Lie About Location on your Car Insurance
Drivers lie about their location for all different reasons, including:
- You just moved to a state with costlier insurance prices but want to keep paying your old premiums
- You’re renting a new place and forgot to tell your insurance company
- You use your parents’ address because they live in a safer ZIP code
- You submitted an old or inaccurate address on your car insurance
Ultimately, there are all types of reasons to lie about location on your car insurance. Sometimes, it’s an honest mistake. In other cases, it’s insurance fraud.
Check with your car insurance company to make sure your location is accurate. If you’re lucky, you’ll catch the mistake before you need to make a claim. If your location information isn’t accurate, then your insurance company could deny your claim, leaving you on the hook for accident-related expenses, a stolen car, personal liability, and much more.