Lying On Insurance Policy Leads To Big Problems

#AskCoreySax

Do you believe telling a little white lie is wrong? Have you ever told a little white lie to avoid hurting someone’s feelings? How about telling a little white lie to save money? In many cases, telling a little white lie does not come back to haunt you; however, there are some lies that can result in a financial hardship.  For example, telling a lie on an insurance application can cause a lot of trouble down the road when you file a claim against the insurance policy.

How Many Canadians Lie on Insurance Applications?

TD Insurance conducted a survey of Canadians to gauge the “habits, attitudes, and knowledge” about insurance. The survey revealed some surprising results. According to the Second State of Insurance Report, one-fifth of Canadians admitted to lying on an insurance application or leaving out information when completing the application. Unfortunately, lying on an insurance application can have serious consequences.

At the worst, lying on an insurance application or lying to the insurance company when filing an insurance claim can be considered fraud. Insurance fraud is a crime that can carry severe penalties if you are convicted. Even if the insurance company does not pursue fraud charges, it can deny insurance coverage based on false, misleading, or missing information. Having an insurance claim denied can create a huge financial problem. The compensation you expected to be there when you needed it the most is not there because you failed to disclose a piece of information on your application or claim form.

It is unclear why some people lie to their insurance company. One of the most common reasons may be financial. The TD Insurance survey also found that 33 percent of respondents admitted they did not file claims so they could keep their insurance rates low. Twenty-one percent of Canadians admitted to canceling or forgoing insurance for financial reasons. Therefore, it appears that financial reasons could also be an incentive for some people to lie to their insurance company.

Another reason for lying to an insurance company could be out of fear of being declined coverage. For example, a person lies about smoking or a pre-existing condition to obtain life insurance. Lastly, some people simply forget, and the incorrect information or the missing information is simply a mistake. However, even an honest mistake can be costly.

What Happens If My Insurance Company Finds Out I Lied?

Most insurance policies contain clauses that allow the company to revoke coverage in the event the policyholder was not truthful. If your policy is not revoked, the company could deny any claims against the policy if it finds out that you lied on your application or claim.

It is always best to be completely honest when applying for insurance and when filing an insurance claim. Insurance companies search for ways to avoid paying claims.  If your insurance company finds one small mistake on your application or claim, it can use that mistake to try to deny your claim. Therefore, do not give the insurance company any reason to deny your claim — always be truthful when dealing with your insurance company.

Hire an Experienced Ontario Personal Injury Lawyer

Some insurance companies may try to use a small, honest mistake to deny your accident claim. Your insurance company may try to deny your injury claim even though you have a valid claim. The team of lawyers at Diamond and Diamond have experience dealing with insurance companies. We understand their unfair tactics.

Call our 24/7 injury hotline at 1-800-567-HURT or visit our website to speak to someone now. We offer free consultations and case evaluations.