Fast Facts About Insurance Policy Backdating

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fast facts about insurance policy backdating

Is It Illegal to Backdate Insurance?

Insurance Policy Backdating, by definition, is the practice of putting a calendar date on any document that is earlier than the date on which that document was actually written. In some instances, it’s perfectly legal. In other instances, it’s not. Let’s look at how insurance policy backdating affects different aspects of car insurance, health insurance and life insurance.

Backdating Car Insurance Policies

Backdating car insurance policies is illegal and something no reputable insurance company or agent would ever do. How come? Because it implies that you had coverage on your vehicle before you actually did. If you could do this, nobody would ever buy car insurance until after an accident happened. That would have the effect of turning the car insurance industry’s risk-assessment-based business model on its head. Before long, there would be no car insurance industry and we’d all be paying for damages and injuries out of pocket. Lawsuits would inevitably skyrocket, clogging our already over-burdened court system.

The only people who would benefit from that would be trial lawyers. Okay, that’s the extreme outcome. Closer to home, consider this: backdating a car insurance policy is insurance fraud. If you’re caught doing it you risk fines or imprisonment, as does the agent who agreed to do it.

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