6 Ways to Invalidate Your Car Insurance
Once your auto insurance policy takes effect, there are only a few things insurance companies can do to cancel your coverage, and most of them involve fraud. Here are the most common six ways to invalidate your car insurance: 1) misinforming providers about modifications made to your vehicle, 2) applying for insurance in another state, 3) using the incorrect address on an application, 4) arson, 5), faking a car theft, and 6) filing inaccurate insurance claims.
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UPDATED: Jul 16, 2021
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You may have wondered what it takes to get your car insurance thrown out. The fact is, once the policy goes into effect, the only legal method insurance companies have of dropping you is to identify areas in your application where you may have been less than honest.
Simply put, your dishonesty is the insurance company’s last resort if they want to drop your policy, and here are six of the most common ways people decide to unwittingly invalidate their car insurance coverage.
- Insure what you drive. If you claim your car is a show-room standard, but you actually have a high power engine under the hood or 26 inch rims, the insurance company does not have to cover the unclaimed alterations. In fact, if the insurance company has reason to think that you intentionally misinformed them about the modifications done to your car, your policy could be completely invalidated.
- Another common form of insurance fraud is when a person claims to live in a neighboring state in order to take advantage of lower rates in that state. The insurance company could rightly claim that you have tried to abuse the insurance system by insuring your car in the other state and your policy would be void.
- Use the correct address. If you claim to live out in some rural area but you actually live in the heart of the city, you are committing insurance fraud. Typically, rural residents pay less for insurance because they are farther from the high crime and accident zones, but claiming to live somewhere other than where you keep your belongings will leave you wanting for car insurance.
- When the economy goes sour, a lot more people try to get out from under unwanted car loans by setting fire to their own vehicles. If you are proven to have done such deed, losing your insurance may pale by comparison to the jail time you would have to serve as well.
- Another way to get out from under a car loan is to fake the theft of the vehicle in order to file an insurance claim. This is a serious offense, and insurance companies will prosecute you to the fullest extent of the law.
- File your claims accurately. It might seem like a good idea to go ahead and add some other damages into the car insurance claims report, but doing so could invalidate your insurance, resulting in none of the repairs getting made, you’re having a hard time finding new car insurance, and other civil and legal penalties.