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Question: Auto insurance quote with unreported accidents? what will happen?

(Posted by: Reginald on 2010-02-10 08:27:32)

A friend has 3 accidents in her driving record. She got an auto insurance quote without mentioning any accidents. The company sold her the insurance without any further verifications. Is that a big problem? In case of an incident in the future will the company check her records and create any problems like not approving claims or so? Should she just ask for a refund to prevent further problems. What is the worst that can possibly happen? We are kind of newbies here. Please advise...

Posted by: Jez on 2010-02-10, 08:42:08

This is essentially fraud. Your friend would be well advised to inform the insurance company as soon as possible. Your insurance premium may be cheaper, but you are pretty much paying them for no cover in return, as if you make a claim and they check your driving history (which I wouldn't be surprised if they did) you will receive no payment from them whatsoever.

Posted by: David W. on 2010-02-10, 10:22:50

If the accidents were not considered your friends' fault, her company shouldn't do anything, except maybe remind her that she should have reported them. If one or more were considered at fault, she'll probably be canceled. Most insurers in the US use a service called Comprehensive Loss Underwriting Exchange (CLUE) and trade this information. Being canceled for fibbing isn't the end of the world, but it will make it harder--and a lot more expensive--to get auto insurance for the next 3-5 years.

Posted by: lj1 on 2010-02-10, 10:46:52

If your friend has an accident, the insurance company will most likely pull her driving record. They might even do it when she renews her policy, even if nothing has changed. If they find out because she had an accident, they may not cover her because she failed to disclose her previous accidents. They will also drop her. If they pull her driving record at renewal time, they will most likely drop her. Your friend needs to call her insurance company immediately, and tell them about the accidents. Better yet, she should pay a visit to her insurance agent (assuming she has one). Best case scenario: she will incur a significant rate increase. Worst case scenario: the insurance company will drop her.

Posted by: Jason Ray on 2010-02-11, 09:15:45

The worst? I would assume that they cancel the premium. If she goes to make a claim, they could cancel the insurance and render any stated coverages void. That situation is probably worse than it sounds -- it can cost her a lot of money or worse, depending on where she lives and what happened. I've created a new auto insurance policy without disclosing a ticket before (accidental omission), but never an accident. They just adjusted my premium a few months down the road. My advice: find a new insurance provider, be truthful with the application, and then she can cancel her existing policy and hopefully receive a pro-rated refund.