Car Insurance Frauds & Costs to Policyholders

This industry is susceptible to cheating and authorities warn that vehicle insurance frauds are on the increase. Apart from being a victim there are indirect ways they affect premiums. Criminal activities cost to whole economy in many ways. Then, unsuspecting policyholders may end up in one of those scams and see immediate rate rises due to inflated claims.

Ways We Can See Fraudsters at Work

Deliberately Causing Accidents: Some of us are involved in crashes that may appear to be innocent and even our fault. A car in front may stop suddenly causing you to rear-end it. These fender benders are common and may be a real one. However, when they start inflating the simple repairs and bills there is likely something fishy going on.

Staged Auto Thefts: These will probably not involve other drivers. They get automobiles taken away and may be sold for parts. Then, they make a claim to get compensation from insurers for a vehicle that is not really stolen.

Organized Claim Bumping: Criminals can work with service providers like garages and organize fake and bumped up repair bills to receive more money from insurers. They may even target you. They can easily approach an innocent driver after a collision. You may have end up in one of those body repair shops that approaches you and offer to handle everything on your behalf.

When they start offering incentives like foregoing deductibles you should think twice before agreeing to work with them. They will bump the bills and add work that has never been done. All the while they will fill their pockets and you will not even get the repairs required properly. They are in for themselves even though they appear to be helping you.

If you suspect anything you should contact the loss adjuster and maybe the police. Letting them get away with these schemes can cost you and other honest motorists money. That is why they must be stopped.

How Fraudsters Costs Everyone?

Immediate Auto Insurance Rate Increases: They may have involved you in a crash that was designed to swindle carriers. They will either make you the at fault party or inflate your bills to make it look bigger than it is. Unfortunately, you would be inconvenienced with all the work and waiting for the vehicle to be fixed. Also, you would lose any discount for no claim and start spending more from the next renewal.

Premium Increases Across the Board: Every dollar they can steal will have to come out from someone else’s pocket. When companies lose a lot of money to these people they will have to compensate the losses by increasing the rates across the board. Always the end users end up picking the bills by way of increased prices.

Innocent Policyholders Will Be under Suspicion: The more frauds go on the more carefully automobile insurers will have to look at claims and they will have to place extra scrutiny on incidents. As a result you will be required to provide more explanation and paperwork.

Costs to the Country: Someone has got to pay for extra police, court and crime handlers’ time to deal with these incidents. This will mean extra taxes in federal and state level. Even they are caught extra prison provision is not going to yield any returns. All these expenses come out of taxes collected from everyone.

They will carry on trying the hardest if they think they can get away with it. Being vigilant and reporting the suspicious activities will help everyone in the short and long term. The good news is that no matter how orginized and cunning they may be they still get caught, mainly because they get greedy.

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