Tips to avoid car insurance fraud

Car insurance fraud is an expansive problem that Billions of dollars are allocated to per year by big name companies, and in turn affects us- the consumers who see higher premiums. There are ways to protect yourself from becoming a victim though. By being aware of different types of frauds and taking some easy measures, you can help keep your rates down and guarantee that you’re not unknowingly funding someone else’s wrongdoings. Car insurance fraud happens alot more than you’d expect!

car accident insurance fraud
car accident insurance fraud

The Different Perils of Car Insurance Fraud

Hard fraud is when someone staging an accident or making a fraudulent claim in order to collect money from an insurance company. Soft fraud is when someone exaggerates their damages or injuries to get a larger payout from their insurer. Fraud of any kind causes honest policyholders—a lot of money.

Hard Fraud

Hard fraud is usually intentional and can involve extensive schemes. This may include something like deliberately crashing into another car or faking your own kidnapping. In severe cases, hard fraudsters will even damage their own property. This includes burning down their car to collect on an insurance policy. Even though it’s often easy for insurers to catch on and deny claims because of how conspicuous hard fraud is, people still attempt it frequently. Based on the Insurance Information Institute, losses from hard fraud only continued to increase in 2018 amounting up to $32 billion.

Soft Fraud

Soft fraud, in contrast, is much more common—yet more difficult for insurers to detect. People committing soft fraud usually try not to break any laws by overstating damage or exaggerating injuries. For example, they might claim the cost of repairs was higher than it actually was or receive reimbursement for medical treatment they never got. And even though soft fraud might not seem like a problem, it can quickly become one! According to the National Insurance Crime Bureau, up 20% percent of all paid auto insurance claims could be fraudulent.

How You Can Avoid Car Insurance Fraud

In order to avoid being a victim of car insurance fraud is by keeping an eye out for red flags. If you’re in an accident, be wary of behaviour from the other driver that could suggest they may be trying to commit fraud. Fraudsters often exhibit certain behaviours or Signs which give them away. You must know what to look for attentively during and after an accident report this type of suspicious activity to your insurer immediately so they can take appropriate action against the offender.

Protect yourself by doing the following:

  1. It’s important to take pictures of the accident, including any damage done to your car or the other driver’s. This will help back up your story if there are ever any disagreements about what happened.
  2. If there are any witnesses to the incident, get their contact information so they can provide an accurate account of what happened.
  3. Don’t trust anyone who asks you not to contact your insurance company or tries to pressuring you into settling outside of court. They might be committing fraud.
  4. Your accident-related correspondence doesn’t stop at the other driver or their insurance company–it’s essential that you keep copies of ALL communications related to your accident. This paper trail will come in handy if any disagreements between parties crop up down the road.
  5. Lastly, always trust your gut! If you get a weird feeling about the other driver or their behavior after an accident, there’s probably a good reason for it. Listen to your intuition and don’t be afraid to contact your insurer if you have any questions or concerns.

Car insurance fraud is an extensive problem that will affect your rates if you don’t take proper precautions. By being aware of the most common types of fraud and taking some simple steps. You can help keep your premiums down and make sure you’re not paying for someone else’s bad behaviour. Thanks for reading!

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