Insurance Fraud

Most likely not. They can disclaim coverage when there are deliberate falsifications on an application for insurance.

jespah-
Thank you. So, if the car owner caused $1 million in damage to a third-party, is he on the hook for whole amount? If he doesn't have the money, does the injured party remain uncompensated?

Recognize that your original question was about what's essentially contract fraud. The conditions were not as the putative insured claimed them to be. Hence the contract was invalid.

And, therefore, in the absence of other potential coverage, the vehicle is uninsured. This means that the driver at fault pays however s/he can, whether that's in dollars, real property, their house, stocks, future garnished wages or something else.

It's very expensive to not be insured, if you get into a major accident. This is how people lose their homes.

In My View Insurance Company will not sanction the claim because there will be terms and conditions and in these you will be prove false.