The toughest thing one finds in buying auto insurance is reporting an accident to a prospective insurer. A lot of people hide the truth from the insurance company as they would be charged higher premiums or at times, not be offered coverage. However, it is a bad idea to conceal such information from the prospective insurer. There is a high possibility of the insurance company finding it out anyway. In such a case, you stand a chance of being refused coverage. So, at no cost, should you withhold information about accidents from the company. Even when you have accidentally forgotten to mention something, make sure that you inform them before they find it out.
What You Are Required to Report
When you are seeking insurance coverage for your car, there are a few things that you need to inform the insurance company of. You have to mention all the accidents you were involved in, be it your fault or the fault of other drivers. Additional information you need to report to the insurance company is your past claims made to the previous insurance companies, if any. You are also required to report information on infractions on your driving record.
Why Applicants Don't Report Past Claims
Some estimates show that 20 percent of personal and commercial insurance policyholders withhold past accident information. However, it is not necessarily true that all of these omissions are intentional. Yet, most of the time applicants hide the information under the misconception that the insurance company would not verify their records. For omissions that were accidental, applicants forget to mention such incidents since the incidents were minor. There are possibilities, too, where the insurance company fails to record the information. For example, insurance agents at times forget to ask the applicant about their accident history and the applicant doesn't realize that he/she has to provide such information. In any case, it is good if the applicant takes the initiative to submit all the details.
Consequences of Not Reporting Past Claims
The implications of not reporting any past claims can be grave. When applicants are attempting to hide any information regarding accidents they were involved in and their insurance history, they could be in for some serious trouble. The whole purpose of hiding the information by applicants is to avoid situations where they would be charged a higher premium or be refused coverage. However, this purpose is defeated when the insurance company finds out that the applicant has withheld information. It is foolish to assume that insurance companies will be in the dark about your insurance history and past claims. Ideally, applicants are asked to report if they have been involved in accidents in the past or if they have filed any claims. Insurance companies double-check this information to verify if it is true. When they find that some information has been concealed and the applicant has intentionally or accidentally failed to disclose it, they might refuse to provide coverage, because of the error.
This is not all; there is a moral implication to it. When an applicant fails to report such information, other drivers are also affected. People with at-fault claims are given lower rates based on the information they have provided and those who have not withheld information are given higher rates, and the latter will be at a disadvantage. So, applicants should act ethically and not withhold any information that is required.
If You Realize You've Omitted Something
There are instances when people do not omit information intentionally. There are times when people forget that they have had an accident, purely because the accident was minor. There are cases, too, where they are not aware that they have to disclose such information to the insurance company while buying insurance for their car. In such cases, when you realize that you have forgotten to mention a past incident and you have already arranged for the auto insurance, you must approach your agent and inform him about the error. You may not feel motivated to do this, assuming that the insurance company will not get to know. Of course, there is a possibility where they may never find out. However, to be on the safer side, it is better to do it before the company actually finds out. At least, you would not have the fear that the insurance company will find out later that you withheld information and consequently, you would suffer for it. The consequences in such cases will be worse than if you admit it before hand. At most, the company would increase your premium based on this new information that you have provided. Moreover, the relationship between you and the company would remain positive. You will remain in good standing with the company and this is worth a lot more than a lower rate achieved by concealing information.
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