Whether it's downright truth-twisting or conveniently 'forgetting' to mention an important fact to your insurer, is it ever okay to lie in the hope of a lower insurance premium?
It’s likely that at some point or another most people have considered lying to their insurer. According to the ABI (Association of British Insurers), 16% of us wouldn’t rule out making an exaggerated claim on our insurance.
And with the knowledge that certain personal details such as your age can have a significant impact on how much you’re charged for premiums, it can be tempting to stretch the truth a little and hope your insurer doesn’t find out. But is it ever worth it?
When is it ‘lying’?
When applying for insurance you’ll need to declare everything about your circumstances including your age, where you live, your occupation, your marital status, and much more besides. This information is used to determine your level of risk and therefore the cost of your premiums.
For example if you were applying for health insurance you’d need to let your insurer know of any pre-existing health conditions or if you are a smoker. If you were applying for car insurance you’d need to declare the main driver rather than naming someone who you know would be perceived as a lower risk driver but who never drives the car (this is known as fronting).
If you have any convictions, spent or unspent, these need to be declared when taking out any kind of insurance. Failing to let your insurer know of any of these circumstances is very likely to land you in hot water.
You might think that if you aren’t creating a complete fabrication but rather just omitting certain details from your insurance application or claim, it won’t be classed as lying. However the practice of not owning up to something, i.e. withholding information that you are well aware of is known as non-disclosure and is just as serious as making up a complete falsehood.
What will happen if I lie?
Bending the truth about the number of miles you drive or telling your insurer you’ve never smoked when in fact you quit only two years ago might seem like a harmless white lie. However, the truth is this is one white lie that could end up costing you thousands.
Your insurer will find out if a claim you have made is fabricated or if you have been economical with the truth on your insurance application. At the very least any claim you make will be turned down and your insurance policy invalidated, making every penny you have spent on premiums an utter waste. You could also receive a fine, be prosecuted, or even receive a prison sentence.
There are plenty of other ways you can secure lower insurance premiums that don’t involve dishonesty or breaking the law. These include increasing your voluntary excess, paying for your policy in one lump sum, and taking advantage of discounts – and none of these methods will land you in jail.
Lying to your insurer is a serious matter and can be classed as fraud. As such you could get a criminal record and would find it difficult to get any kind of financial product in the future.
When you take into account the potential consequences of lying to your insurer there’s only one conclusion to make: it’s just not worth it.
