Auto Insurance Fraud and You

The auto insurance industry in the United States has an ever growing fraud problem, and recently, with the new economic downturn, the number of fraudulent claims filed to insurance providers is at an all time high. Auto insurance fraud has quickly climbed to be the second most costly form of crime in the United States, just behind tax fraud.

How Auto Insurance Fraud Works
Auto insurance fraud is often hard to detect, and the extremely creative scammers aren’t making the auto insurance companies’ jobs any easier. There is a wide array of popular scams that auto insurance providers spend millions of dollars on each year to prevent and prosecute.

Of course, there are also many scams that go completely undetected, and with new scam tactics being uncovered all the time, it makes you wonder what other elaborate scams are out there. Most fraudulent activity involves multiple driver who set up traffic scenarios that forces a third, unknowing driver to slam into the back of one of the other vehicles. The key is to make it look like the victim is actually at fault in the accident so they can get paid by the insurance provider.

Most fraudulent claims aren’t usually this elaborate. In fact, most fraudulent claims are actually quite simple. Every year thousands of claims are reported to insurance companies, and though they may look innocent on the surface, it isn’t unusual for insurance companies to discover upon inspection that one of their customers has intentionally inflicted damage upon their vehicle.

How Does Auto Insurance Fraud Affect You?

You don’t have to be a victim of a planned collision to be affected by car insurance fraud. If you have an auto insurance policy then you are already paying for the crimes of others. It costs millions upon millions of dollars to fight fraud, and the ones that don’t get caught will cost you even more. To make up for these immense costs, insurance companies must charge their customers more.

What Can You Do About Car Insurance Fraud?

Sadly, there isn’t much you can do about insurance fraud. The only way to protect yourself is to keep an eye out for suspicious activity, and to report it to your insurance company, should you fall victim to one of their scams.

There is, however, something you can do about the soaring costs of auto insurance. Some auto insurance providers are better at detecting fraud than others, and as a result can charge you less for coverage.

If you’ve noticed a spike in your auto insurance premium, it may be due to insurance fraud. It’s good practice to check competing rates before you renew your current policy. You may be paying more than you need to. Enter your zip code above to see how much you could save.