What You Need to Disclose to Your Auto Insurance Company—and Why It Matters

What You Should Disclose Before Buying a Policy

When you first apply for auto insurance, insurers rely on the information you provide to determine your premium and the level of risk you pose. Here are some of the key things they need to know:

1. Driving History

Your past behind the wheel is one of the biggest indicators of future risk. Insurance companies will want to know about:

• Accidents (fault and no-fault)
• Moving violations (like speeding tickets)
• DUIs or reckless driving charges
• License suspensions

They typically pull your driving record, but it’s still your responsibility to be truthful on the application. If a recent ticket hasn’t shown up yet in their system, and you fail to report it, you could be accused of misrepresentation.

2. Vehicle Information

Insurers need accurate details about the vehicle you're insuring. This includes:

• Make, model, year and Vehicle Identification Number (VIN)
• Mileage
• Safety features and anti-theft devices
• Whether it’s leased, financed or owned outright

You’ll also need to let them know if the vehicle has been salvaged or rebuilt, as this can affect coverage options.

3. Vehicle Usage

How you use your car directly impacts your rate. Be honest about:

• Whether it’s used for commuting or business
• How many miles you drive per year
• If it’s a secondary or primary vehicle

Saying you only drive 3,000 miles a year to get a lower rate — when in reality you drive 15,000 — can backfire if you file a claim.

4. All Household Drivers

Insurers typically require a list of everyone in your household who could drive the vehicle. This includes:

• Spouses
• Teen drivers
• Roommates
• Adult children living at home

Even if someone doesn’t drive often, they may need to be listed or excluded. Failing to list household drivers can give the insurer a reason to deny a claim if that person ends up behind the wheel during an accident.

What You Should Disclose After You Have a Policy

Your responsibilities don’t end once the policy is in place. Life changes, and when it does, your insurance company needs to know about it — especially if it affects your coverage. Here are a few common scenarios that should be reported:

1. New Drivers

If your teenager just got their license, or someone new moves into your household and starts driving your car, let your insurer know right away. Adding them to the policy ensures they’re properly covered and avoids headaches if there’s a claim later.

2. Vehicle Modifications

Installing a lift kit, custom rims, a turbocharger or even an upgraded sound system? Any modification that alters the value or performance of your vehicle should be reported. Some mods can increase risk or theft potential, and your insurer may need to adjust your coverage or premium.^[1]

3. Change in Use

Maybe you’ve started using your car for rideshare driving or food delivery. Or perhaps you now work from home and drive far less than you used to. Letting your insurer know how your vehicle use has changed could save you money — or at least keep your policy accurate.

4. Accidents and Claims

Any accident should be reported to your insurer even if you're not at fault. If you don’t, and damage related to the incident later shows up, it can complicate a future claim. Likewise, if you’ve filed a claim with another insurer (say, under someone else’s liability coverage), your primary insurer should know about it.

Why Disclosure Matters: Potential Consequences

It might seem harmless to skip over a detail here or there — especially if it lowers your premium. But insurance companies take non-disclosure seriously, and the consequences can be steep:

1. Claim Denial

If the insurer finds out you withheld information, they can deny your claim — even if the issue you didn’t disclose didn’t directly cause the loss. For example, if you fail to list your teen driver and they total the car, the insurer may refuse to pay.

2. Policy Cancellation or Rescission

In cases of material misrepresentation, the insurer might cancel your policy entirely or rescind it from inception, meaning they act as though it never existed. That can leave you without coverage when you need it most.

3. Higher Premiums or Surcharges

Even if the insurer doesn’t cancel your policy, they may recalculate your premium after discovering a previously undisclosed risk. You could be hit with back-billed premiums or higher rates going forward.

4. Legal Trouble

In extreme cases — especially if fraud is suspected — you could face legal consequences. Insurance fraud is a crime, and deliberately withholding important information can land you in serious trouble. "Soft fraud" can seem like a minor exaggeration or omission, but it still counts as fraud.^[2]