You are here:HomeNews CenterInsurance News2017Things People Lie About Most on Their Car Insurance

Things People Lie About Most on Their Car Insurance

A new report by Verisk Insurance Solutions reveals that lies and honest mistakes by customers and insurance agents cost automobile insurers an estimated $29 billion in 2016. That amount equals 14 percent of the total premiums that motorists pay for personal auto coverage, the report estimates...
May 2, 2017

A new report by Verisk Insurance Solutions reveals that lies and honest mistakes by customers and insurance agents cost automobile insurers an estimated $29 billion in 2016. That amount equals 14 percent of the total premiums that motorists pay for personal auto coverage, the report estimates. In insurance terms, inaccurate information leads to underpricing, or “premium leakage.”

Verisk estimates that 12 percent to 15 percent of car insurance policies omit drivers, such as a parent who forgets to add a newly licensed teen driver or young-adult child who returns home. Residential moves, new jobs, and other changes also make estimating mileage difficult, the report notes. The type and age of a car, who owns it, and whether it is used for business also are often inaccurate. It is important to keep in mind that insurance fraud is against the law, and sophisticated tools are available to find discrepancies. If an insured is caught in a deliberate lie, the insurer could deny coverage for a claim.

Filed under: