I moved to Boston, but I never informed my insurance company or agent, does it matter?

Yes, it does. Auto Insurance companies lose billions of dollars annually due to policyholders misrepresenting where their primary residence is located and where their vehicle is principally garaged or parked. So, it becomes obvious that there is lots of financial incentive to investigate a claim if misrepresentation, intentional or not, is suspected.

Your auto insurance policy is a contract that you signed, and part of that contract is an obligation for the policyholder to inform the insurance company of anything that is inaccurate, incomplete, false or misleading information, especially if it causes the insurance company’s risk of loss to increase. There are volumes of data which prove that a vehicle driven and parked in Boston is at a much greater risk of loss than in a suburban town. This is why companies base their rates on the Zip code, town or county of where the insured principally lives.

How can the insurance company prove where I live?

It’s not too difficult. Here are some typical red flags and ways to investigate:

  • The distance between the address on your policy and where you work is substantial
  • A policy with a P.O. box as a mail address
  • A different address on the license or registration than the policy
  • Spotting the vehicle on drive-byes
  • Utility bills and possibly rental leases
  • Online social media searches
  • Covertly and overtly talking to neighbors, family and friends

What are the consequences?

Not good. If you have a claim and your insurance company discovers that your garaging is inaccurate, then they have a right to deny your claim under any and all of the Optional insurance coverages on your policy. Optional coverages include collision, theft, vandalism, and perhaps most importantly any Bodily Injury to you or other that is above $20,000.

It’s simply not worth taking the risk. After all, the point of insurance is to transfer risk away from you and to the insurance company. And what’s worse than paying for insurance only to find out you are not insured when you make a claim.

How to avoid having a claim denied

Be honest. Provide accurate information on your application, and if you move, inform your insurance company or agent as soon as possible. It will likely cost you more money, but it’s worth it because you will have peace of mind knowing your insurance will pay when you need it. When rate evaders do not pay their fair share, it causes companies to increase rates for everyone, including those friends and family living and driving in their suburban towns.