What are the legal ramifications, if any, of providing false information on an insurance application to get a better rate?

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What are the legal ramifications, if any, of providing false information on an insurance application to get a better rate?

Asked on September 29, 2011 under Insurance Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

It is fraud.

At a minimum, it would:

1) Mean that any insurance quoted or provided based on that information would be void at the option of the insurance company; and

2) The insurer may very well have grounds to sue the person for monetary damages or compensation--e.g. for the commission it paid out on a void contract; for the difference in premium between what was paid and what should have been paid; possibly for legal costs, too.

In addition--

3) It's possible, depending on the exact circumstances, that thee person providing the false information could face criminal liability, too, since fraud is a crime.

In short, this is potentially a very dangerous thing for someone to do.


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