How “Don’t Worry About It” Can Lead to Car Insurance Fraud
When it comes to your auto insurance policy, accuracy is king – no matter what anyone tells you. But if you’ve discovered a small error in your policy and your agent told you “not to worry about it,” the case of Maurer v Freemont is a perfect example of why you definitely should worry about it. Moreover, it’s a case of potential, unintentional car insurance fraud.
When you sit down with your auto insurance agent to apply for insurance, you’ll be asked a series of questions. These questions are used to calculate a monthly premium quote. Minor tweaks here and there, regarding seemingly small details, can often impact your monthly premium amount. But these little tweaks, if factually incorrect, may be considered car insurance fraud and can void your policy altogether. Cancellation of your policy can lead to a lapse in coverage when you and your family need it most.
Vigilant policyholders may notice these errors and call their agent to correct them. Unfortunately, people are often told: “It’s okay, this is just a minor discrepancy that doesn’t need to be corrected.” This conversation is often conducted via a quick, unrecorded telephone call. The policyholder hangs up feeling reassured that all is well. But with no paper trail, this process can lead to devastating results in the future.
Maurer v Fremont
This is exactly what happened in the case of Maurer v Fremont. The vehicle owner and her husband purchased an auto insurance policy from a local agent. She was a part-time postal employee and occasionally used her personal vehicle to deliver the mail. When reviewing their policy, her husband noticed the vehicle was described as “for personal use only.” He notified the agent of the discrepancy, and the agent assured him the policy did not need to be changed and to “not worry about it.”
Following a very serious accident, the postal worker later submitted a claim to her insurance company for approximately $1.4 million in medical expenses. Upon receipt of her claim, the insurance company initially refused payment. They cited the business-use discrepancy and would not honor the policy altogether. Despite no ill intentions, this is a classic example of car insurance fraud. Fortunately, after a lengthy and complicated lawsuit, the insurance company was eventually forced to pay the claim. However, more often than not in car insurance fraud cases, the insurance company wins.
This case serves as a reminder that, even when a person fully discloses all important facts to their insurance agent, the policyholder is still at risk of losing coverage if something is incorrect or misrepresented.
Tips for Avoiding Unintentional Auto Insurance Fraud
All of this begs the question, “What can you do?” The answer isn’t always simple and won’t necessarily be the same for everyone. However, there are some important steps that, when taken, can help prevent you from unintentionally committing car insurance fraud:
- When applying for new auto insurance, make sure you answer all the questions asked by the insurance company during the application process fully, completely, and honestly.
- Review the information you provide an insurance company carefully, especially if someone else enters it for you.
- Insist the correction of any inaccurate information, regardless of what your agent advises.
- Notify your insurer immediately when there are any life changes that affect the answers to your insurance application and verify their change.
- Do not allow your insurance agent to persuade you into leaving a factual discrepancy uncorrected.
As the Maurer case demonstrates, insisting that necessary changes are made can often be the difference between maintaining insurance coverage and car insurance fraud. It also demonstrates the importance of always being accurate and vigilant when it comes to your auto insurance policy.
Finally, knowing what your policy covers — and more importantly, doesn’t cover — is essential. Our attorneys have meticulously created a handy Buyer’s Guide to No-Fault Coverages highlighting key insurance features you may want to consider for keeping your family protected and safe.
Authored by personal injury attorney, Joel Finnell