Car insurance fraud can be a big problem for everyone, not just insurance companies. This is because insurance fraud causes everyone’s rates to rise. Fraud means a loss for the insurance company, and the cost of losses are passed on to policyholders. So, what is considered insurance fraud? In this article we’ll talk about a few types of car insurance fraud that are costing drivers billions of dollars each year in higher premiums.
What is Insurance Fraud?
The bottom line is that insurance fraud includes any attempt to deceive an insurance company for your own financial gain. Fraud is illegal everywhere and many insurance companies are cracking down on their investigations in order to expose criminals.
What Are Some Examples of Insurance Fraud?
Car insurance fraud includes a wide range of actions from holding back simple information from your insurance company to broad and elaborate deception schemes. Here are a few examples:
Providing false information
If you fill out a quote with false information and then enter into a policy agreement based on this information, you have committed insurance fraud. Always be honest with insurance companies. They have many ways to learn the truth.
If you try to file more than one claim for an injury or you file a claim for injuries that aren’t related to the accident, this is fraud. Similarly, if you over-report your missed wages due to accident-related injuries, or any other detail related to your compensation, you are committing insurance fraud.
Inflated Repair Costs
A common method of insurance fraud happens when the repair costs for a vehicle covered are reported higher than they actually are. This can happen when a mechanic uses cheap parts but charges for expensive parts, for instance. Or, they may overstate the damage caused and then keep the money that is paid for unneeded repairs. This is insurance fraud and the mechanic is using the insurance money for their own gain.
Making a Fake Stolen Vehicle Report
Falsely reporting a vehicle as stolen is a major form of insurance fraud. This can happen when a vehicle is intentionally abandoned, burned or dumped somewhere and then reported as stolen in order to collect the insurance money. Sometimes, fraudsters will even sell a vehicle and then report it as stolen in order to collect twice the money; once for the sale and once from the insurance company.
Registering a car in a state that is not the state you live in is a false (and illegal) registration. This is not uncommon for people who live in states with high auto insurance rates. This tactic is essentially used to mislead the insurance company in order to avoid paying higher premiums.
Car insurance fraud is a criminal offense, one that everyone should recognize and report if they have a suspicion. This will aid in keeping premiums low for drivers. And, if you’re looking for lower premiums, use the InsuranceWins form. We’ll help you get quotes to see how much you can save.