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Common Forms of Car Insurance Fraud

Car insurance fraud is a plague for this industry. And there are many forms of car insurance fraud, but the effect is the same: increased premiums costs for all policyholders. Find out the common forms of fraud and stay away from applying them. Also, get insurance quotes online auto and compare prices. It is far better than lying and hoping for cheaper premiums. But first, let’s analyze the following types of car insurance fraud:

“Hard fraud” involves intentionally creating a fake situation in order to receive an insurance settlement. If caught, individuals committing hard fraud can face steep fines and jail time.

“Soft fraud” is more common than hard fraud, perhaps because it is harder to detect. While soft fraud has less severe punishment, penalties still include fines, community service or probation. Exaggerating injuries or damages after an accident or providing misinformation to an insurer are forms of soft fraud.

Jump-ins: People who were not in a car during an accident pretend they were injured. They hope to receive a settlement from their insurer or the other driver involved.

False injury claims: Someone reports injuries that did not actually occur. Following a minor accident, a person might make a claim against you for medical bills for injuries. If you believe these injuries didn’t occur, tip off your insurer. It can refer the incident to your state’s insurance fraud bureau.

Owner give-up: A policyholder abandons or sets fire to their car, then reports it stolen in order to make a claim. Some people even conspire with professional con artists, paying them to dispose of cars.

Claims padding: A policyholder adds more problems to an insurance claim than what actually occurred. Claiming more pain/injuries than you actually suffered after an accident falls under this category. Working with a mechanic to add to repair costs to a claim, or having a mechanic fix pre-existing damage as part of a claim, are other examples.

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