Why It Is Important To Be Honest With Your Insurance Broker
We all heard of the phrase “honesty is the best policy”, and this is especially true when it comes to dealing with your insurance broker for a number of reasons. For one thing providing false information on your insurance application can result in negative repercussions for you in the future, such as having your claim denied or your insurance policy voided outright. Even more, you could be charged with insurance fraud which in Canada carries with it a criminal charge under the federal Criminal Code. In this blog we will talk about why it is important for you as a client to be upfront with your insurance broker so that you can be properly covered in the future.
Not Being Forthright With Your Insurance Broker Can:
Result In A Denied Claim
The first and most common consequence is having your claim denied when you are looking for financial coverage after suffering a loss. In fact, insurance companies in Canada have the legal right to reject your claim if they find you misrepresented important details when applying for your policy.
For example, if you fail to disclose a licensed driver that resides in your household and they get into an accident while driving your car, your insurance company may deny the claim. If this happens, you can expect to suffer significant financial loss as you will be responsible to pay the repair bills for the damages caused to your vehicle and to the vehicles of the involved parties.
Void Your Existing Coverage
Not providing full disclosure to your insurer can result in a denied claim, but even worse, it could mean that your insurer voids your policy outright. If information has not been accurately provided to your insurance broker, it is a clear signal to your insurance company that you are breaking the legal contract where you signed off that “all the information provided is true and accurate”. Failing to do so can result in you having to look elsewhere for auto, home, and/or life insurance.
Cause You Problems In Finding Insurance With Other Companies
If you have been dropped as a customer by your insurance company for misrepresentation, finding insurance elsewhere may be a hard task to accomplish. As such, you will be deemed a “high-risk customer” within the entire insurance industry. There are special companies that arrange coverage for high risk customers, but you can expect to pay significantly higher premiums for basic insurance coverage.
Result In Facing Legal Action
The most serious consequence is the possibility of facing legal action as a result of insurance fraud. Insurance fraud is a serious offence and should not be taken lightly. At the very least, you could be faced with a fine. In more extreme cases, jail time may have to be served.
So, the moral of the story is this: always err on the side of caution and be truthful with your insurance broker when applying for insurance, filling out applications, or when you are changing your policy for any reason.
today so that we can find insurance policies that will provide the best protection for you while being on the road and all your other unique insurance needs at very competitive rates.