Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Written by Shuman Roy
Content Writer & Entrepreneur Shuman Roy

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Jun 28, 2022

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The relationship between an insurance agent and an insured should be a close one, built on mutual respect and most of all, trust.

Of course, there may be complaints on both sides. You may feel like your agent only calls you when he or she needs money, and your agent may feel like you only talk to him or her when you get into an accident or have a problem.

But like any other relationship between two human beings, there are likely going to be some white lies committed by both sides.

This article examines the top 10 most frequently told lies between insurance agents and their insured.

Of course, it’s important to note that these lies are the exception and not the norm. Most agents are hard working, helpful and honest business people.

First we’ll look at the top five white lies agents tell their customers.

Insurance Agent Lies

1. The lie: “This is the lowest insurance premium I can get for you.”

The truth: A captive insurance agent can never guarantee you the lowest available rate, as they only represent one insurance company. As far as independent agents go, some agents are partial to a specific carrier for ease of use or maybe they receive a higher commission from a particular insurer that doesn’t offer the lowest rate.

2. The lie: “You need to call the insurance company for help with that.”

The truth: Some agents, in an effort to minimize their workload, may instruct an insured to call their insurance company to make a payment or ask a billing question. In reality, most insurers are set up to allow agents to process payments out of their offices.

3. The lie: “You need this coverage to be safe.”

The truth: There are some unscrupulous agents out there that oversell coverage or policy add-ons. While it is recommended you always purchase as much coverage as you can afford, there are some basic guidelines you can follow regarding how much auto or homeowners insurance you might need (10 insurance policies you may not need).

4. The lie: “You don’t need all that extra coverage.”

The truth: Conversely, there is the agent who tries to get the lowest premium in town by skimping on coverage for their insured. Let’s face it, we’re all looking for a good deal, but when it comes to insurance, it’s better to have the coverage you need than a rock-bottom premium. When working with an agent, be sure to ask why they made the recommendations they made. If they can’t give you a straight answer, shop around.

5. The lie: “I will call you right back with that answer.”

The truth: Many insurance agents are small business owners. As such, they have limited time and a limited expense budget (when it comes to adding staff). Their goal is to have as many policies in force as possible. This often times leads to the, “I’ll call you right back” line, which may be said with the best intentions and not followed through on. You may need a new agent if yours makes it a habit of not returning your calls promptly.

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Insurance Customer Lies

1. The lie: “Yes, I am the only licensed driver in the household.”

The truth: Agents know that insured often tell this white lie to avoid paying a higher premium for that family member who has MVR and C.L.U.E. report activity. Some insurers are capable of looking up relatives and others who have lived in your home or simply have the same name and force you to list or exclude them in order to issue a policy.

2. The lie: “I don’t have any tickets, accidents or insurance claims (that I can remember).

The truth: Almost every insurance company in America runs and MVR and C.L.U.E. Again, similar to #1, you probably won’t get away with playing the “foggy memory” card. The agent may be fooled, but the insurance company will find those speeding tickets.

3. The lie: “I don’t use my truck for business purposes.”

The truth: The ladder rack and the magnet on the side of your truck in conjunction with your paint stained clothing gives you away every time. For the record, it can be less expensive for a commercial auto policy than a regular personal auto policy in some cases, so there is no reason to tell a fib or worry about the cost.

4. The lie: “I do not run a business out of my home.”

The truth: Homeowner’s insurance policies typically offer “incidental business occupancies” or some other form of business coverage as an endorsement option to expand coverage for your small home-based business. If your business doesn’t fit that model, it is recommended you find an independent agent who can find you a policy that will allow your exact home business. At the end of the day, if you get caught in this white lie, you may have a claim denied.

5. The lie: “Yes, I want that policy and I will call you back with my payment information.”

The truth: This one hurts the most. If you are not interested, please say you aren’t interested. Agents should be hardened sales people, so they can take the fast “no” a lot better than a drawn out maybe. In fact, you’ll be saving them time and money, as they can move on to something else rather than spending time working a dead lead.

As you can see, most of the white lies going in this direction are told in order to save money, whereas on the insurance agent side, most are told to make money or avoid doing work.

Whether you believe a lie is harmless or not, when it comes to insurance, a lie can leave both the agent and the insured in a tough spot.

So whichever side you happen to be on, try to be as accurate as possible when selling/shopping for insurance. After all, it’s certainly better to be safe than sorry.

Tip: 10 ways to lower your car insurance premium.