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Lying is a risky way to bail yourself out of higher auto insurance premiums. But, as with speeding, you may get away with it.

I don't want to encourage successful fibbing, because it's not right that honest drivers pay more than their fair share of premiums.

Yet I will tell how you might get away with lying about your driving and accident record, if only to encourage governments to fill existing loopholes.

Two readers have asked similar questions about reporting their accidents to an insurer. One drove a relative's car, one a rental car.

Both have the same obligation under their own insurance policy to disclose the incidents. If they were at fault, both could then face paying higher premiums, no matter how minor the damages.

An insurer could refuse to offer a new policy or to renew an existing policy if the driver had an accumulation of at-fault claims and driving infractions.

"Even if there was not a record of the accident, if the applicant had an admitted, at-fault accident we would use this in rating the policy," said an official of State Farm Mutual Automobile Insurance Co., the largest insurer of Ontario autos.

"Failing to advise of an at-fault accident is nondisclosure and could result in cancellation of their policy," said Shelley Toyota, director of underwriting at Royal & Sun Alliance Insurance Co. of Canada.

"When cancelled for nondisclosure, that driver could have trouble obtaining auto insurance with regular-market insurers in the future."

So, while telling the truth could have financial consequences, telling a lie could have even greater consequences.

Affected drivers will call this a "cash grab." The majority of careful, or lucky, drivers will regard this as just desserts that will indirectly save them money.

Now you ask: How are they going to catch a lie? It's easy if the vehicle you are driving, or the car you run into, is in North America and has auto insurance.

You will be required to disclose your driver's licence at the scene of an accident. The owner of the car you are borrowing or renting will have to identify you, and your driver's licence, when reporting a damage claim. Insurers then make that information available to data sellers, such as CGI Group Inc. of Montreal, for resale to other insurers, along with information about driving infractions supplied by ministries of transportation.

There are potential gaps that fibbers could successfully exploit.

Accidents outside of North America are generally not reported to Canadian insurers although it is conceivable an insurer based in Europe would tell its Canadian subsidiary.

An executive familiar with CGI's Autoplus claims data notes also that some car rental companies and commercial fleet operators self-insure collision damage.

They have nothing to gain from sharing their accident information with insurers or CGI, whose reports on collision and repair information could depress the resale value of repaired vehicles.

It is therefore possible you could accidentally ram a rental car into a Bell Canada van, scrape a post, or pay to repair the relative's car you were driving without your insurer ever finding out.

So here's an idea for governments struggling to hold down insurance prices for the majority of honest drivers, while also protecting buyers of collision-damaged vehicles: Require rental companies, fleet owners and collision repair shops to make driver information accessible to auto insurers.

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