Question:
Will an insurer care that I forgot to list a speeding ticket I got
last year? It slipped my mind while shopping for a new
insurance policy. Is it really that important that the
insurance company knows about all of my violations?
Answer:
Yes. Your rates were based on the insurance company's calculation
of the risk you posed. More tickets equal more risk of claim.
Usually an insurance company will find out about a ticket even
if you accidentally (or purposely) leave one out. At that point, if
the omission is a minor violation, the company will recalculate
your premium based on the new information. But the new rate isn't a
punishment for lying or forgetting, only a recognition that you're
not quite the risk you said you were.
To give you an
accurate quote
, you need to supply an auto insurance provider with accurate
information. The quote you get is based on the personal information
you provide. If you decide to act on the quote and buy a policy,
the insurer then verifies the
rating factor
data you've given by requesting copies of certain reports, such as
your
credit history
(if state laws allow), claims history (
C.L.U.E. report
), and motor vehicle record (MVR).
When something shows up on a report that you didn't inform the
insurance company about, the insurer will re-evaluate if you're an
acceptable risk. You may still be offered a policy, but your
rates could change from what you were originally quoted. One
minor ticket may not change rates much, if at all, but if it's a
major offense expect your rates to jump significantly or the offer
to disappear altogether.
If you already purchased a policy, then when the insurer finds the
"forgotten" information you may be notified that your premiums were
modified due to this new data and that to keep your policy in
effect you will need to pay an additional premium amount.
If you don't pay the extra cost, the policy will cancel out.
Or you may just be informed by the insurer that it's
canceling your policy because it now perceives you to be a
high-risk driver that they don't want to insure.
State laws on cancellation once a policy is started vary, but
one typically allowable reason is misinformation on the
application. Intentional misrepresentation can be seen as insurance
fraud.
If your rates go up, or your policy is canceled after your insurer
finds the missed speeding conviction, then shop around to get the
best car insurance rates possible -- and this time make certain to
provide insurers complete information. (See "12 ways to
double-check your savings.")
Another insurer might not penalize you for an additional minor
violation. The rules are very different at each company.