Home Insurance Articles
Why Home Insurance Fraud Does Not Pay
2010-06-02
Every home needs reliable home insurance to protect both its structure and contents. Finding a company that both offers necessary coverage, as well as reasonable service, can be a difficult endeavor, but is well worth the time and effort. Home insurance can cover everything from the foundation and physical structure of a house to the valuable possessions of the owners. The coverage can take the form of a basic policy which covers only "known perils" such as lightning strikes or home defects, to a more robust comprehensive policy which has a substantial list of coverage and only a modest amount of exclusions. But regardless of the level of coverage purchased, one of the most difficult times for any homeowner is when a claim must be made. Home repairs can be costly, and many homeowners have, at one time or another, considered being less than completely truthful about the extent of the damage to their home as well as the cause. While this may seem like a good idea, there are several reasons why home insurance fraud does not pay.
First and foremost, it will not succeed. Being dishonest about the amount or value of the possessions in a home will almost immediately be found out. Insurance companies will request a detailed list of the value and appraisal of any expensive items in the home and if this cannot be provided, the claim will be rejected. If the claim seems excessive, the insurance company will actively pursue an investigation, and if it can be determined that items were reported destroyed that did not exist, extremely serious consequences can be the result. Not only can your home insurance cost increase, but your company has every right to drop you if they see fit because you have been dishonest. Even a legitimate claim can be stalled if a homeowner accidentally over-represents the items in their home. If you are unsure if there were four or five televisions destroyed in a home fire, for example, report only four. If you report five but the remains of only four are found, you could be accused of fraud even if that was not your intention.
Secondly, home insurance fraud can cost you both time and money. As mentioned above, not only will your provider likely cancel your policy, but finding new insurance will be difficult. Insurance companies will request a list of your history and claims, and have ways to find this information out if you are not forthcoming. Your home insurance cost could skyrocket if you have even a hint of fraud on your record. In insurance as in all business dealings, honest is always the best and most cost-effective policy.