Most auto insurance policyholders trust their insurance company to approve their claims when they’re involved in a car accident. There are a few instances where criminal or illegal activity—either intentional or unintentional—can lead to a denial of your claim. These activities can include overt fraud or even something as simple as the discovery of counterfeit documents in your vehicle. If the police uncover evidence of a crime in the aftermath of the accident, you’ll probably face consequences beyond criminal charges.
Insurance fraud can impact an auto insurance claim.
One of the easiest ways to ensure your claim is denied is to commit insurance fraud. Types of insurance fraud can vary, but the FBI estimates that insurance fraud costs the average family between $400 and $700 in premiums a year1. There are two common types of insurance fraud, hard fraud and soft fraud. Common hard insurance fraud scams include:
- Staging an auto accident to force another driver into a crash and then claim it’s their fault
- Vehicle theft in which the owner has someone else steal the car, strip it for parts and files a claim
Common soft fraud practices involve:
- False or omitted information on insurance applications, including incorrect address information
- Misrepresenting claims, such as including previous damage as part of a current claim
- Submitting claims forms for injuries or damage that have not occurred
If your insurance company finds that you’re responsible for or engaged in any of the above practices, there’s a high chance that they won’t just deny your claim. They’ll also probably cancel your policy.
How Criminal Activity Influences Your Auto Insurance Rates
As a general rule, driving-related offenses increase your insurance premiums. The amount of the increase depends on the type of offense you engage in; failure to yield at a stop sign or speeding tickets could raise your premiums by between 10 and 18 percent for three years, while drunk driving could raise your rates by 37 percent for as long as five years2.
Repeat traffic offenses, hit-and-run offenses and vehicular homicide or manslaughter convictions will also raise your premiums significantly due to the obvious risk you pose as an unsafe driver.
Insurance companies do not typically run criminal background checks, so non-vehicle related offenses probably won’t impact your insurance premiums too much. An exception to this rule would involve prison time. If you’ve spent time in jail, your auto insurance may have lapsed. Most insurance companies view a lapse in coverage as an indicator of elevated risk, so your premiums may increase.
Car Accidents Caused While Committing a Crime
Being involved in a car accident while in the act of committing a crime, such as being the getaway driver in a robbery or burglary, is a surefire way to have your claim denied, as is using your car to commit a violent offense such as an assault or homicide. Reckless driving, either as a result of driving while intoxicated or as part of a hit-and-run, will also lead to denied claims.
Discovery of Illegal Activity Unrelated to the Accident
But what if your illegal activity is unrelated to the accident? What if a police officer uncovers evidence that you’ve forged and plan to sell a fake COVID-19 vaccination card (currently a felony3) or have shoplifted and are on your way to sell the stolen goods? In regards to the fake vaccine cards, your activity isn’t explicitly tied to the accident, but you are in the process of committing a crime.
Although no companies have expressed a statement on how they would handle counterfeit COVID-19 vaccination cards, an insurance company could decide to deny your claim due to the criminal aspect.
SelectQuote helps compare auto insurance rates to find the best fit for your needs.
Drivers who’ve previously been labeled high-risk but who no longer fit that qualification may have questions about auto insurance and how their past can influence their current auto insurance premiums. If you have questions about auto insurance approval or if a criminal record may impact your ability to get car insurance, SelectQuote can help.
We compare rates from some of the most trusted insurance companies to help you save time and money. We can help you find auto insurance that meets your unique needs, whether that’s full coverage for a brand new car or a policy to keep you on the road.