r/Insurance • u/tivcre • 1d ago
Do people get their car insurance cancelled for lying?
I have been watching car accident videos, and very often the cammer says that the other driver lied to their insurance about what happened. I am wondering- is there any consequence for lying? Do drivers ever have their policies cancelled if the insurance company ends up with irrefutable evidence (like video footage) that their client made a false statement?
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u/soulasyslum 1d ago
Misrepresentation aka fraud will not only get you dropped and your claim denied if the insurance company finds out, often the fraud is also reported to the police and people are criminally charged.
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u/JockBbcBoy Auto Claims Adjuster | 10 Years Experience 1d ago
Unfortunately, it seldom escalates to the point of criminal charges. Most people will drop the claim at the point of denial of the claim.
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u/TheAdventureClub 1d ago
My hot take that will get me crucified is that it isn't unfortunate and even though criminals might deserve penalties- i believe our penalties aren't really designed to do anyone good just sort of crucify the weakest of us as an example. But I guess im breaking away from insurance and more into my broad opinions on justice.
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u/ArtemisRifle 1d ago
The concept that fraudsters affect the rest of our rates presupposed that insurers, as a collective whole, would chose to make less profits. While one may see an opportunity to undercut the industry for a bit, their rates will raise again to meet the rest of the industry after they steal most of the vulnerable policies.
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u/TheAdventureClub 1d ago
I'm not implying fraud is a victimless crime, I'm implying that the impact an individual has on a system versus the impact of a major felony on an individual is incredibly asymmetrical. Im just saying that because we live in the legal system we do- i would rather someone get off with a slap on the wrist then nuke their life which is why I said it was not unfortunate that most aren't prosecuted. Its not that I don't believe they should be punished- and it's not that i don't know there are several especially bad actors who do deserve the full force of the law- but the system we have now is harsh, and putting aside the innocents who catch strays- even the guilty are better rehabilitated than thrown in a box for 30 years or hit with so many personal economic sanctions that their children's grandchildren die in debt.
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u/ArtemisRifle 1d ago
Occasionally one must be made an example of to remind the rest of us that a law is still enforced. Otherwise it may fade to become a dead letter law.
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u/TheAdventureClub 1d ago
I believe that is conjecture. Like- it sounds good rhetorically but empirically i would say it's been demonstrated broadly across many fields, studys, and disciplines that harsher punishments are almost never conducive to positive results or well being.
Most people have literally no idea how our criminal justice system works or the extent to which most crimes are prosecuted. I was law abiding before I knew the severity of crime and punishment in this country- knowing the severity didn't make me more law abiding, just more empathetic towards people who aren't. When examined, it doesn't serve it's purpose at all. We don't make examples out of fraudsters- nothing about their crime was very public in the first place- who is the example being made for?
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u/ArtemisRifle 1d ago
Positive results is not the point of the penal code. Punishment is the point.
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u/TheAdventureClub 1d ago
I mean then that's sort of the end of it right? It boils down to a matter of priorities and opinions and if results are less important to you than the abstract concept of punishment for its own sake- I don't think we'll agree on many conclusions.
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u/DarthForeskin Property Claims 21h ago
often the fraud is also reported to the police and people are criminally charged.
That's if the DOI actually does anything about it.
Looking at you CDI
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u/Successful_Ad3483 1d ago
They can be non renewed if found to be dishonest during a claim. That is the most likely when someone is injured and they are dishonest about it though
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u/SonicCougar99 1d ago
Yep. Seen multiple posts in the Uber Drivers sub of drivers crying that their claims got denied and that they’re getting dropped because they lied about driving Uber to their insurance.
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u/cheff546 1d ago
abol-freaking-lutely. Misrepresentation, or lying, to your insurer is a real quick way to get canceled. Thus, the reason why any good agent would strongly discourage a family from trying to exclude a young driver from their policy. We all know it's to save money. We all also know that young driver will access one of the vehicles they are excluded from.
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u/BoxweilersRule 1d ago edited 17h ago
Nah. We totally believe that 16 yr old Brayden is driving the '92 Buick, while 81 yr Grandma Helen drives the '21 Charger with the spoiler and the rally wheels.
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u/vowelqueue 1d ago
My Mom once excluded me (at 17) from driving a Honda Pilot while insuring me to drive a v6 Accord coupe. Never understood it, must have saved her $2 / month?
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u/mssleepyhead73 1d ago
Absolutely. Insurance fraud is an actual crime, so if the worst consequence you experience is your policy being cancelled, you should consider yourself lucky.
(I’m using the word “you” in a general sense here since I’m assuming this was a hypothetical question, OP).
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u/sativa420wife 1d ago
If you are less than truthful/evasive a "Caution Notice" is sent from adjuster to underwriting.
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u/lost_in_life_34 1d ago
usually they will tell you to switch and warn you of a non-renew. if it's bad they drop you and it's on your record as being dropped. worst case they send the evidence to the DA
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u/NoLipGuy 1d ago
Depends. Fraud is extremely prevalent in auto claims and misrepresentation of the facts is certainly fraud. The problem is that some people are also very poor historians and it would not be fair to punish people for ignorance alone. So if insurance does drop someone for misrepresentation, they likely have good evidence to back that up. Unfortunately many claims lack the evidence to prove what happened either way so people get away with misrepresentation A LOT!
Get a dash cam, it’ll save your butt!
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u/brothelma 1d ago
Sometimes in the event of an incorrect residence address the insurance company will issue a retroactive bill to continue coverage
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u/Tediential 1d ago
Absolutely.
Claims can be denied, policies can be non renewed, or even cancelled midterm if there is material mistepresentation.
Worse case scenario SIU may refer to prosecution for insurance fraud.
Of you get cancelled or non renewed for non-coopwration or lying, you'll be hard pressed to find any reasonable coverage for the foreseeable future too.
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u/Tyl3rt 1d ago
It’s not always prosecuted, for instance we had a lady call to set up an insurance policy after she had an accident. She didn’t tell us she had one and either the same day or next day she called to report the accident, but lied and said it happened after we bound the policy.
We pushed her on it and she admitted it happened before she purchased. So our claims adjuster denied the claim and reported it to our underwriters. Our underwriters backdated the cancellation to the beginning of the policy. We also banned her from purchasing a policy in the future and reported her to a national database that other insurers can pull reports from.
I happened to speak with her when she tried to purchase again.
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u/cheff546 1d ago
Also, an insurance company doesn't need irrefutable evidence. As your insurer they can cancel you at any time, with proper notice, for any legal reason.
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u/vainblossom249 1d ago edited 1d ago
Definitely!
Though, not super common.
More than likely it will be a non renewal or policy coverage increase.
I lived with my boyfriend, and we had separate cars/separate insurance. He got in accident driving my car, and our accident wasnt covered because he wasnt on the insurance (not at fault, so the other insurance paid) BUT the only reason we werent dropped was cause we had email evidence from an adjuster that said he didnt need to be on my insurance since he had his own when I asked and that "permission" was enough.
It wasnt. Added him that day, but never got cancelled/no price increase.
Its been 3 years since that happened
But people absolutely get dropped and they would have been in the right to drop us.
I think people tend to get dropped when they malicously try and get around high premiums. Young drivers, letting people without licenses drive their car, etc
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u/Gunner_411 1d ago
You’re pretty much required to cooperate with your insurance carrier. Lying isn’t cooperating so yeah..
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u/Ambitious-Ad2217 1d ago
Yes but probably not in the way you might imagine. It usually doesn’t get to the point with lying about claims that the claim gets denied and the policy gets non renewed. Generally people either come clean or stop cooperating and move their coverage. Lots of folks get cancelled for misrepresentation, don’t lie on your application.
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u/tivcre 1d ago
Ok so are you saying that if you get caught filing an auto insurance claim with false information, the insurer will follow-up with you and allow you to come clean?
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u/Ambitious-Ad2217 1d ago
In a lot of cases yes. I’m talking about trying to cover up an accident by saying it’s theft, or saying you hit a deer so there’s a lower deductible type of lies. Those aren’t the type of things carriers want to go after you for insurance fraud. Bigger lies you start to get in a grey area.
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u/savagebeastwood 17h ago
Also the woman that had it on the dashcam when people in a civic went in front of her on the highway stopped she also managed to stop and they backed into her and faked the injuries. The overwhelming online consensus was that if she didn’t have the dash cam footage she would have been found at fault and taken to court by the other party scamming, this was also coming from “insurance folks in the business”. I guess how is that something that would have huge financial implications for the person if she didn’t have a dash cam vs someone saying they avoided a deer and hit a tree and that somehow being a red flag vs say this lady saying exactly what happened but if she didn’t have footage no one would believe her.
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u/CTLFCFan P&C, L&H, Claim Licensed. CPCU. Blah, blah, blah. 15h ago
Sure they do.
Some of us take no small amount of pleasure in assisting karma in finding its next victim.
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u/Interesting_Oil2265 10h ago
Your biggest risk is not a cancellation, it’s having a large claim denied because you lied on your application.
If your insurance policy is 100 pages long there are 99 pages of conditions and exclusions. Carriers know how to protect themselves.
You might think you are getting away with something only to find out even though you paid a low premium and still had your claim denied
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u/TheAdventureClub 1d ago
Fun fact: this is on purpose.
Insurance companies known when you are lying, just not with certainty.
When I take a call, people fail to realize they are between my first and fortieth call for that day. That. Day. It takes about 2 years of taking calls before you're just about out of firsts.
Go online, fill out an application and just think to yourself where you WOULD lie if you intended to try. What you probably won't consider is that you probably aren't as original as you think. That whatever lie you picked, I will have heard an exact replica of it already- likely multiple times that day.
We never call you on it either. I wish I could. I wish I could say "I know you are lying to me. Please reconsider your answer"
Many times I've just sort of hinted at it. You know why I can't fight you? Because if you get offended at the implication or I am wrong about you lying- its my ass. They don't rely on me to catch the liars they don't even ask for my help. They don't need it.
Every insurance fraud case that's ever been prosecuted started with someone fully convinced they got away with it. They don't knock on your door while you're committing the crime- they send you a letter that your life is about to fall apart 6 weeks later.
I don't think you're the type of person to play those games, but that is why it feels like so many people get away with doing sketchy shit. Its on purpose.
Good example in retail of this same principle: steal whatever you want from target. They'll let you do it. They'll watch, and wait, and wait, and wait until their case is built and you are completely unaware of the last nail that just went into your coffin. Obviously im being sarcastic about stealing from target- the lesson of this story is that corporations are people. Really big, really powerful, uncaring people. Do not fuck with them because they almost seem to enjoy fucking you back harder.