When you purchase auto insurance, you sign an insurance application that has a lot of information about you on it.
These days, “signing” often means just clicking a box on a screen—no more pen-and-paper signature. While we click all day, this is one click you should treat a little differently. Before signing, you’re usually asked to “review the application to check for accuracy.” That reminder is more important than it seems!
Your signed application is used by the insurance company to determine (1) if they find you eligible for insurance and (2) how much their rating tables say you should pay. In Michigan if you make a mistake when applying for car insurance, it can be a basis for the insurance company to deny a claim or even revoke your policy. It does not matter if it was a mistake, omission or if it was made intentionally, the law in Michigan considers it a “misrepresentation.”
The insurance company’s process of evaluating your application does not involve checking the validity of all the information you signed off on. However, your application gets a second, closer look if you have a claim – especially a large claim. If the information on your application does not match reality, your claim could be denied.
My recommendation is to slow down and review every question on the application before signing it or clicking on a signature gizmo on a screen. Check your assumptions on what you think a question is looking for. And do not try to outsmart the insurance company. Some examples of this include: not telling them about someone who regularly drives your car and has a bad driving record, or any high performance modifications to your car, or changing the garaging location to a better neighborhood where a parent or friend lives, or not disclosing that you are an Uber driver or make deliveries for money.
Your insurance agent is there to help you properly get through the entire application process. A good conversation with your agent, with the application in front of you, makes the whole process so much better!
