Lying when applying: How we lie to insurers | finder.com

Lying on an insurance application

29% of Americans have lied on a car insurance application

Honesty is the best policy. But not all Americans believe it gets them the best insurance policy, according to a recent finder.com study.

Some 35 million Americans say they’ve played fast and loose with the facts when applying for insurance, with a whopping 10.2 million (29%) of these lies told on car insurance applications. Health insurance fibs take second place at 7.5 million (22%) lies, followed by life insurance at 7.3 million(21%).

Type of insurance % Estimated total
Car insurance 29% 10,261,140
Health insurance 22% 7,554,905
Life insurance 21% 7,329,386
Income protection insurance 8% 2,931,754
Travel insurance 7% 2,480,715
Home and contents insurance 7% 2,480,715
Pet insurance 5% 1,916,916

Source: finder.com

Who tells taller tales to insurers: Men or women?

Of the genders, it turns out we’re both pretty partial to alternative facts. Women are more likely than men to lie on an application in five of seven categories: health insurance (22%), income protection insurance (9%), travel insurance (8%), home and contents insurance (9%) and pet insurance (7%). Women are three times more likely to stretch the truth for car insurance than to protect their home and its contents.

Men are more likely than women to stretch the truth when applying for car insurance (31%) or life insurance (23%). They’re four times more likely to lie for life insurance than when picking up income protection.

Type of insurance % of women % of men
Car insurance 27% 31%
Health insurance 22% 21%
Life insurance 17% 23%
Income protection insurance 9% 8%
Travel insurance 8% 7%
Home and contents insurance 9% 6%
Pet insurance 7% 5%

Source: finder.com

How lies relate to your living situation

Does who we live with affect what we’re willing to lie for? Possibly. When it comes to car insurance, renters are most likely to deviate from the truth — 32% of those who rent their homes admit to lying to an insurer in the past, compared with 29% of homeowners and 28% of those who live with their parents or family. Renters are also most likely to lie when applying for life insurance (25%) or pet insurance (7%).

If you’re a homeowner, you’re more tempted to lie on a health insurance (24%) application than when applying for home and contents insurance (24%). And those living with family are more likely to trifle with the facts when applying for travel insurance (11%) or income protection insurance (11%).

Type of insurance Homeowners Renters Living with
parents or family
Car insurance 29% 32% 28%
Health insurance 24% 21% 18%
Life insurance 18% 25% 22%
Income protection insurance 10% 5% 11%
Travel insurance 7% 5% 11%
Home and contents insurance 9% 5% 7%
Pet insurance 5% 7% 4%

Source: finder.com

United we bluff: Lies by state

Of Americans who are most likely to lie to insurers, Arizona takes the lead, with 25% of its residents admitting to lying on an insurance application. The Grand Canyon State is followed by California (22%) and Ohio (20%).

The consequences of insurance fraud

Insurance companies ask a lot of invasive questions when deciding whether to take you on as a policyholder. But there’s more at stake than your pants catching fire when you lie on an application.

Even a white lie can come back to haunt you. If you’re caught, you risk your insurer voiding your policy or, worse, charging you with fraud, which can come with fines and even jail time.

If you’ve found yourself in a situation where fibbing feels like your only option, it’s a good sign that you haven’t yet found the right policy for you. Get quotes from multiple insurers and compare your options to find the cheapest rates and strongest protection you’re eligible for.

Methodology

This data is from a June 2018 survey of 2,020 US adults commissioned by finder.com and conducted by Pureprofile.


September 25, 2018

Jennifer McDermott

Consumer advocate helping people improve their personal finances.


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