According to the Insurance Research Council, 24 percent of Americans view padding behavior as acceptable, and 10 percent of Americans believe insurance fraud doesn’t hurt anyone.
However, the Coalition Against Insurance Fraud estimates that fraud may cost insurance consumers $29 billion annually. Why should that matter to you? Because customers end up absorbing a lot of the cost, which may amount to about 14 percent of your car insurance premium.
Additionally, schemes that involve staged car accidents or fake crashes put other drivers and their passengers at risk on the road.
Types of car insurance fraud
Here are some of the most common types of car insurance fraud to look out for:
- Injury fraud – either through staged car accidents or fraudulent claims leading to payments for unnecessary medical treatment or treatment not received
- Exaggerated claims damages – used to cover the deductible
- Conspiracy with medical providers and attorneys – receiving unnecessary medical treatment or getting payments for treatment not received
- False registration or documentation – registering a vehicle in a place where premiums are lower, understating annual mileage,e or misrepresenting the use of a commercial vehicle help fight fraud
What you can do:
- Understand your rights and responsibilities in your insurance policy, and contact your agent with any questions.
- Fill out and carefully check your insurance application forms for mistakes.
- If you get in an accident, record all persons involved and take pictures at the scene.
- Refuse to sign any documents or agree to any terms at the site of an accident.
- Call the local police if you suspect car insurance fraud.
