An insurance company can properly deny coverage if there is insurance fraud involved. You appear to indicate that your mother did not tell the truth. If so, then she might not face whatever legal problems she thought she might avoid, but the trade off is she does not get insurance coverage.
Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult with your own attorney.
Insurance fraud comes to mind. So yeah shes kinda put herself into the corner. I don't have any advice for your mother. What a tangled web we weave when we practice to deceive.
The above information does not establish an attorney client relationship nor is it meant to provide legal advice.
Your mom had a parking lot accident, and likely did not tell the other owner what happened because she did not see any damage. The questions are how much is her deductible; and whether its worthwhile to make a claim when she will end up paying more for the repairs in insurance than she would if she just paid for the repairs herself. The insurance company can deny the claim if the claim is false.