Have you been deceived in auto insurance? You want to know what are the main forms of fraud or scams and how to report or notify an auto insurance? You can find clear answers in this article, in which I tried to explain to you everything you need to know about car insurance fraud and how to beware not to be fooled.
What You Need to Know About Auto Insurance Fraud
If someone were to ask you how much you knew about auto insurance fraud you’d probably feel fairly comfortable telling them you know everything you need to know to get by. Everyone knows you shouldn’t smash your car with a baseball bat and pass it off as an accident when your headlights break, and if you try to hide a car in your garage and report it stolen the claims adjuster is probably going to figure it out sooner or later. But did you know that you could actually be the victim of auto insurance fraud and not know it until it’s too late?
Insurance fraud is a crime. And far from being a victimless crime, insurance fraud victimizes every one, costing consumers millions of dollars in the form of increased premiums and higher prices for goods and services. The exact cost of insurance fraud is difficult to estimate because much of it goes unreported.
Do I have your attention now? Good. Many people are surprised to find out how much they don’t know about auto insurance fraud. There are people out there who prey on innocent drivers, using their belief that they’re safe when they’re out on the roads as long as they’re following the rules to cash in on some major bucks from their insurance. You might be responsible for an accident that you actually had nothing to do with, just because you were in the wrong place at the wrong time!
Wouldn’t you like to at least do the crime before you get blamed for it?
Common Insurance Scams
Here’s a quick glance at the most common frauds that have been wringing thousands out of insurers in auto insurance claims:
1) The Good Samaritan. How many times have you found yourself anxiously tapping your fingers against your steering wheel while you wait for your chance to make a turn, change lanes or pull out of a stop? Almost inevitably someone will eventually take pity on you and wave you into traffic. Nine times out of ten you’re going to be just fine. You’ll pull into traffic, the other car will wait just like they told you they would and life goes on.
There’s always that one in ten chance that it won’t, however, which is when auto insurance fraud decides to raise its ugly head. You’ll go to pull out into traffic when suddenly that same driver who so kindly waved to you suddenly slams on the gas and crashed into you. In front of a judge, they’ll deny ever agreeing to anything, and you’ll be holding the ticket while they collect on your auto insurance.
2) The Rear Ender. You’re smoothly driving down the road, maintaining a perfect following distance, when suddenly a car cuts out in front of you, skids into your following distance then slams on the brakes. Since you don’t have time to stop the only thing you can do is rear end them, and voila! Suddenly you’re in the hot seat for an accident you were technically responsible for but never had a prayer of avoiding.
3) The Mobster. Accidents happen, and if you’re a good citizen you’re happy to pay for the damages you actually caused. But what about the ones you didn’t? If you happen to become the Mobster’s victim you’re going to find both insurance companies accusing you of thousands of dollars of damages you didn’t commit. Why? After your perfectly legitimate accident, the other driver took a baseball bat and roughed up their car a little, then blamed you for the whole thing.
What You Can Do About It
If you fall prey to one of these con artists, don’t get mad. Get even! Carry a disposable camera around in your car to take pictures on the scene immediately following the accident so you have a tangible record of what damages were actually yours and which ones they pulled out of a hat. Always talk to the witnesses at the scene and ask for their record this can be invaluable if you happen to run across the Rear Ender or the Good Samaritan.
Finally, don’t be afraid to tell your auto insurance provider when something’s fishy in Denmark. Chances are if they’ve gotten you it’s not the first time. Drivers with a record are going to look mighty fishy in court if you decide to fight your culpability. These frauds happen, and the court system knows it. If you’ve got your photos, your witnesses, and your own reports well in hand you’ll be in great shape when the time comes to go before the judge and figure out whodunit.
How To Combating And Report Vehicle Insurance Fraud
Auto insurance policyholders are fed up of the annual increase in insurance premiums caused by policyholders who stage accidents to file a claim and get compensated by the insurers. However, certain measures should be put in place to combat this criminality, and everyone must play their role to make the fight a success.
Policyholders are not happy when they get a notice informing them of an increase in their auto insurance premium even when they have maintained a clean driving record over the years. A lot of us would think the companies are only trying to exploit their customers and make excessive profits: this is not the case. The major factor behind the consistent increase in premiums is the auto insurance fraud which increases insurers’ cost, and this increase bounces back to policyholders in the form of higher premiums. A lot of people have turned this crime into a full-time business, and ranks the second most popular “White Collar” criminality in the United States; thousands of policyholder gets away with fake claims every year. Although most big insurance firms have created investigative units in a bid to curb this problem, only a hand full of the perpetrators is caught. If your premiums are becoming unaffordable, then get an online quote today.
Recent statistics reveals that motorists pay an excess of over $300 annually as a result of Car insurance fraud. The big question is “How do these criminals rip off their insurance providers?” Here are some common ways:
1. Policyholders Get Rid of Their Cars
This is very common. This occurs when a motorist abandons his car, most times in a lake, or set it ablaze. Such claims are difficult to investigate; the driver can simply claim they snatched his car. This makes it difficult for the investigators to carry out any meaningful investigation.
2. Made-up Report of Vehicle Theft
In the event that the owner sells the car before it was reported stolen, there are two outcomes: Firstly, compensation for the replacement of the vehicle and then the repayment of the actual sale of the first car.
3. Overstated Cost of Replacement and Repairs
This is common among repair shops. A repairer may fix a car with inexpensive parts but charge the insurance firm for high-cost parts. Some shops even charge thousands of dollars for an airbag that was actually not replaced. If caught in this act, the culprit may serve up to a year’s jail term, coupled with a fine that runs into thousands of dollars.
Another popular insurance fraud is the “golden hammer.” When a vehicle is involved in a minor accident, the policyholder uses a hammer to cause severe damage to the car so as to inflate the claim. If you notice any of these unwholesome acts, quickly report to the appropriate authorities, to make them pay for their dishonesty and this will curb the rate of insurance fraud in the industry.
4. Falsifying Personal Data Registration Form
Your zip code determines your insurance rates. A lot of people play smart by registering with false addresses with lower premiums. This contradicts insurance ethics, and if caught, your insurance package may be terminated. While filling the insurance registration form, ensure you fill your correct address.
5. Bloated Cost for Windshield Replacement
Have you ever experienced a situation where a mechanic you’ve never met before that time, approaches you, telling you the consequence of your cracked windshield? This is a big scam currently gaining grounds all over the country. These mechanics tell ignorant customers that they can fix the cracked windshield in few minutes, and their insurers will handle the bill. All they do in the real sense is to replace the windshield with a cheap one, and the insurer pays the full price. Don’t be a victim. If you must fix your car, ensure you visit a certified mechanic.
The issue of car insurance fraud has eaten deep into the insurance industry. However, with our little efforts, we can curb the problem to the minimum. If you notice any sign of insurance fraud, quickly file a report to your local insurance department.
If we all join in the fight against this fraud, the criminals will get out of business, and this would reduce our insurance rates.
Where You can Report Auto Insurance Fraud
To report fraud auto insurance, you need to find an institution lawyer specializing in insurance fraud. We searched and found some of these are highly rated and you them here:
The NICB is a non-profit organization that partners with insurance companies and law enforcement to help identify, detect, and prosecute insurance criminals. The NICB website is an excellent source of information
National Association of Insurance Commissioners (NAIC)