“I cannot tell a lie.” – George Washington
Setting aside the irony that this George Washington quote was entirely fabricated by his biographer, our nation’s first President was known to be a man of virtue and integrity. Since Presidents’ Day is this month, we thought it would be a great time to remind everyone to emulate Washington’s (not his biographer’s) sense of honesty when it comes to your insurance.
Insurance fraud is a serious crime, and it ends up costing all of us more money in premiums and time dealing with lengthy investigations. Because insurance fraud is so prevalent, up to $160 billion a year in the U.S., insurance companies are forced to keep a highly trained staff of investigators and lawyers to dig into suspicious claims. If you’ve ever completed an insurance claim feeling like you were really put through the wringer, blame an insurance criminal. To avoid even inadvertently committing fraud, it’s important to understand what it is and how to handle it correctly.
Avoid Committing Insurance Fraud on Your Application
When buying new insurance or working with an agent for the first time, the questions they ask might be a bit overwhelming. The data insurance agents collect really establishes a foundation for the life of the policy.
Application fraud, when discovered, will void your coverage and prevent you from being able to obtain new coverage for a period of time. This kind of fraud is sometimes due to accidentally leaving out important information, but other times it is purposefully dishonest. Application fraud may look like any of the following:
- Covering business property under homeowner insurance or covering personal property under business insurance
- Not including pets, or lying about a breed, when buying homeowner insurance
- Obtaining coverage in order to file a claim on something that already happened
- Using someone else’s identity or lying about individuals who should be included or excluded from a policy
- Falsifying information about an address, value of property, daily commute, or pre-existing conditions
A good rule of thumb is that if you’re not sure if a certain piece of information matters, bring it up. Even if the result is a higher premium, you will have the correct and legal coverage.
Avoid Committing Insurance Fraud During Annual Updates
Your insurance agent should check in at least once a year to go over any changes to your coverage. Rather than wait for this call, think proactively about updates as they occur. Life events, new pets, major changes to property, significant purchases, and business developments could require changes to your various policies.
Failing to update coverage is most often an oversight, but it can have a major impact on a claim. If a claim is filed regarding property, people, or liability issues that have not been added to the policy, it might be greatly reduced or outright denied.
Insurance is never a “set it and forget it” product. Get comfortable keeping in touch with your agent to make sure you’re always covered for exactly where you are, what you’re doing, and what you have. This is one reason it’s so important to have an insurance agent who is both knowledgeable and responsive.
Avoid Committing Insurance Fraud on a Claim
When it’s necessary to file an insurance claim, it’s crucial to stay on the right side of the law. A fraudulent claim will void your coverage and prevent you from getting it elsewhere, will subject you to civil fines and restitution, and could result in criminal prosecution. It’s never worth it, even if you think you deserve it or it’s only a small amount. Fraud is a crime at every level.
To avoid fraudulent claims, be mindful of the following:
- Never exaggerate injuries or medical conditions, and never ask a medical professional to falsify a diagnosis
- Do not inflate the value of lost possessions or claim property that was not impacted
- Do not include any injuries or property damages that were not associated with the incident in the claim
- Never lie about where or how an incident occurred
- Never lie about or fabricate the cost of repairs or replacements
- Never give false information about yourself or give a false statement on someone else’s behalf
If you discover that you made a mistake in how you reported your claim, call your insurance agent to discuss what happened. They can help you determine the best next step to make it right.
Work With a Trusted Insurance Agent and Always Be a Trustworthy Client
Most of the time, insurance is simply a routine expense. But when a claim-worthy event happens, you need to know that your insurance is exactly right for the situation. At Smyrl Insurance, we educate, nurture, and empower individuals through insurance so that they are partners with us in maintaining proper coverage and completing legitimate claims. Contact us to review your existing policies or to learn more about what you might need based on your current circumstances. We serve clients for personal, home, auto, business, and life insurance in Hatfield, Lansdale, Souderton, Harleysville, and throughout Montgomery County, Pennsylvania.
