Is It Ok to Fib to My Insurance Agent a Little?

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Q: Is It Ok to Fib to My Insurance Agent a Little to Get Better Insurance Rates?

I live in the hip downtown area, but my auto insurance rates are sky high. Can I tell my insurance company that I still live at my parents’ house in the suburbs so my premiums are lower?

I'm a young professional just starting out on my career, and finally moved into my own place in a great neighborhood. Money is still tight though, and I was shocked when I saw what my car insurance rates would be at my new address. How bad would it be for me to tell my agent I still live at home with my parents in the suburbs, and use their address on my policy? Just for a little while, until I can get on my feet?

A: Lying to your insurance company to get lower rates is, simply put, a fool’s bargain. I absolutely advise against doing that, ever. Here’s why: 

Your insurance policy is a contract. It is a deal between you and your insurance company in which your insurance company agrees to pay for damages and losses for covered events, and you agree to do what you said you would do, which in this case includes living at your address of record. In the event that you file a claim and your insurance company discovers that you live at a different address from the one you reported to them, they have grounds to deny your claim, even if you are current with your premiums. 

Keep in mind, insurance companies base their rates on statistics. They know, for example, that your car is far more likely to be stolen in the downtown area where you live than it is in the suburbs where your parents live. They may also have statistics showing a greater instance of vandalism or even accidents in the vicinity of your city apartment. This is why you are getting quoted a higher rate for that address. 

It is never a good idea to lie to your insurance company with the intention of securing lower rates. If your claim is denied because of such a falsehood, you will lose far more than you could have possibly saved by paying lower premiums.

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