By Josh Anish on January 18th, 2012 in Consumers
A recent report put out by Quality Planning asserts that car insurance carriers lost more than $15 billion in 2010 from drivers providing incorrect information on their applications. That number represents almost 10% of all revenue generated from car insurance policies written in 2010.
So, putting moral questions about lying to the side -- if that’s at all possible, or advisable -- should you join the fibbers’ parade if you can’t beat them, so to speak?
Let’s take a step back. Getting car insurance isn’t like buying a pack of gum; you can’t just walk up to the counter and do it. You’re asked a host of personal questions including your level of education, what you do for a living and your marital status. And while the specific formula for the best quote on car insurance has never officially been revealed, we can all assume that more education, higher earnings and/or a spouse lead to better rates.
Back to the question at hand, the answer is a resounding “no.” Yes it is true that carriers don’t have the ability to fact-check everything you share about yourself. But the fact of the matter is that car insurance is big business with all sorts of corporations and players. The industry is going to make back that $15 billion, and it’s going to do so quickly.
The money is going to be recovered with across-the-board rate increases. In other words, those losses will be passed directly on to consumers -- all consumers.
So in a sense, the misstatements of today will leaded to the extra costs of the not-too-far off tomorrow.
All of this on top of the moral dilemmas involved with lying in the first place.