Sadly, the main reason people think they should lie to their insurance broker is to save money. However, lying to your broker can have serious consequences, and ironically, usually, it ends up costing you more money!
In an effort to inform you of the consequences of lying to your insurance broker, the timing for this blog is perfect, as April 30th is National Honesty Day! We’re here to explain why being honest with your insurance broker is imperative.
Four Consequences of Lying to Your Insurance Broker
#1 Cancelled Policy
If you lie to your insurance broker or withhold information and they become aware of this, there is the possibility that your insurance policy could be cancelled for material misrepresentation. Furthermore, you could also be put into a high-risk category, which can impact future insurance costs limiting your options.
#2 Denied Claim(s)
If you file a claim and your insurance provider or broker becomes aware of your dishonesty, the insurance company could reserve the right to deny your claim. To avoid having any claims denied, it is best that you avoid lying or withholding from your insurance provider and broker.
#3 Higher Premiums
If your insurance company finds out you lied on your application, they could penalize you by charging higher premiums. And, even if you decide to find a new insurance company, you will be marked as a high-risk client, meaning it will be difficult to find insurance at a decent premium elsewhere.
#4 Criminal Penalties
Lying to your insurance company is no joke, and if the consequences we have already listed are not enough to deter you from being dishonest, then being charged with fraud might be! Insurance fraud is an offence under the federal Criminal Code and is punishable, on conviction, by imprisonment for cases involving an amount over $5,000.