TD Insurance conducted a survey of Canadians to gauge the “habits, attitudes, and knowledge” about insurance. The survey revealed some surprising results. According to the Second State of Insurance Report, one-fifth of Canadians admitted to lying on an insurance application or leaving out information when completing the application. Unfortunately, lying on an insurance application can have serious consequences. Second State of Insurance Report At the worst, lying on an insurance application or lying to the insurance company when filing an insurance claim can be considered fraud. Insurance fraud is a crime that can carry severe penalties if you are convicted. Even if the insurance company does not pursue fraud charges, it can deny insurance coverage based on false, misleading, or missing information. Having an insurance claim denied can create a huge financial problem. The compensation you expected to be there when you needed it the most is not there because you failed to disclose a piece of information on your application or claim form. It is unclear why some people lie to their insurance company. One of the most common reasons may be financial. The TD Insurance survey also found that 33 percent of respondents admitted they did not file claims so they could keep their insurance rates low. Twenty-one percent of Canadians admitted to canceling or forgoing insurance for financial reasons. Therefore, it appears that financial reasons could also be an incentive for some people to lie to their insurance company. Another reason for lying to an insurance company could be out of fear of being declined coverage. For example, a person lies about smoking or a pre-existing condition to obtain life insurance. Lastly, some people simply forget, and the incorrect information or the missing information is simply a mistake. However, even an honest mistake can be costly.