Why It Is Important To Be Honest With Your Insurer
Most car owners are of the opinion that insurance providers always look for ways to avoid paying out car insurance claims. However, this is far from the truth. In fact, insurance companies are willing to pay every claimant as long as valid claims are raised. The insurer would never want to upset a customer who has had a long-term relationship with them. Hence, just like all financial products, it is very important that you are honest and upfront with your car insurance provider.
Full Disclosure Versus Partial Disclosure:
One of the most common causes of dispute between car insurance customers and insurers is non-disclosure or partial disclosure of information from the side of the policyholder. The issue crops up at the time of a claim. This could even lead to the rejection of the claim.
- When an individual buys a car insurance policy the insurer assesses his/her risk based on the information provided. The insurance coverage is offered at a premium that corresponds to this risk. So if the customer had not made a full disclosure at the time of policy purchase, his/her risk assessment would not have been accurate. If the insurance company identifies this in the event of a claim, the claim can be rejected.
Let us take the example of a family in which the father is offered a lower insurance premium than his teenage son. In order to get a lower rate on car insurance, the father claims that he is the regular driver of the vehicle. However, if the car was involved in an accident and as part of the insurer's investigation it was found that the regular driver is not the father as disclosed, the claim can be rejected. The father may also face higher premiums for insuring the vehicle in the future. In some instances, there may be car insurance cancellation for non-disclosure or partial disclosure. Following this, the car can even become uninsurable with the same insurance provider!
- If the insurance company asks for information about your driving history, you should be very honest in this matter.
- If you have a vehicle that will be used for commercial purposes, it is important that you inform the insurer of the same and buy an appropriate motor insurance policy. This way, the claims process in the future will be quicker and will conclude easily.
Car Insurance Fraud:
If your car is stolen, you should raise a claim under your insurance policy. You also need to file an FIR so that the police can locate your missing vehicle. When you are reporting the incident to the insurance company, it is crucial that you reveal the truth. You should be honest with details such as the following:
- The location where the vehicle was parked
- The details of the driver
- The use of the car (whether private or commercial)
- The Insured Declared Value (IDV) of the vehicle
- The authenticity of the theft claim
You should bear in mind that honesty is, in fact, the best policy in the realm of car insurance as well. Fraudulent claims are viewed very seriously in the industry. Being dishonest with the insurance provider may affect your future premiums and even pose issues when you apply for insurance from another provider!
Dishonesty while reporting a loss to a car insurance company is one of the main reasons for claim rejection. If you want to save money on car insurance, do not lie to the insurer; instead research the companies that offer best rates for extensive coverage. The aim of insurance is to help you financially at the time of an unprecedented event that resulted in losses. Being honest with your insurance company will ensure that your claim will be paid out without any hassles.
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