Ever wonder why your auto insurance premiums are so high? Yes your driving record, sex, age and if you have been cancelled do factor into your insurance rate. An even bigger factor is auto insurance fraud. An article on Edmunds.com states “auto insurance fraud adds $200-$300 a year to your individual insurance premium.” Auto insurance costs consumers in several ways. This article will explain some types of auto insurance fraud, some ways to protect yourself from auto insurance fraud, and how auto insurance fraud costs consumers.
The National Insurance Crime Bureau (NICB) sites staged vehicle accidents, intentionally destroyed vehicles (which the owners make false statements about how the vehicle was destroyed), inflated insurance claims, and false theft reports. Sometimes fake injury claims are also filed which perpetrators try to claim workman comp and personal injury damages. (Source NICB handout Insurance Fraud: Understanding the Basics). Edmunds.com adds “accident scams, insurer tricks, and referral fraud.”
How can you protect yourself from auto insurance fraud? Common sense is a good place to start. You could read the article “Protect Yourself From Auto Insurance Fraud” on Edmunds.com. The advice I took away from the article is double check insurance offers you did not request. Be wary if the cost of insurance is a lot lower than other insurers especially if it is an insurance company you do not recognize. Protect your information and do your homework. Be careful on the road and trust your instincts. If you are in an accident get the proper information, insurance, license, names and contact information for everyone involved including passengers. After an accident take pictures of all vehicles involved and if possible wait for the police so you can have a copy of the police report. Plain and simple you want to protect yourself now and in the future after an accident. If you suspect auto insurance fraud you should call the NICB at 1-800-835-6422.
How does auto insurance cost consumers? Auto insurance costs consumers in higher insurance premiums. Businesses also have higher premiums which means they have to charge more to consumers for goods and services. According to Edmunds.com “the Insurance Research Council estimates that excess payments made by auto insurers due to fraud totaled as much as $6.8 billion in 2007.” All forms of fraud cost consumers a lot and auto insurance fraud does cost consumers. “Fraud is the second most costly white-collar crime in America after tax evasion.”
Auto Insurance Fraud: What It Costs You
Protect Yourself From Auto Insurance Fraud