Common Auto Insurance Frauds
Join 1000's of Authors at StreetArticles Today!

With thousands of policyholders or customers who depend on how the company performs and types of services available, an insurer is a trusted institution with the main job is to protect financial investment including cars and medical expenses. Car insurance company, however, is not without weaknesses; some people use these weak points to commit frauds or scams. The potential targets are not only the policyholders, but also the insurer. Some of the most common auto insurance frauds are as follows.

1. Deliberate Accident

It is also known as staged rear-ending or crash for cash, meaning the scammer deliberately drives very closely in front of your car, and when the circumstances are right, this scammer slows down or even suddenly comes to a full stop. The most possible outcome is that you crash the vehicle from behind. The accident is intended and cleverly planned that you will not notice it is deliberately committed.

The scammer will most likely to stop at an intersection or in very busy traffic. In almost all states, rear-ending is considered the fault of the driver in the rear vehicle; in this case, you are considered at fault.

Following the accident, the scammer can file a claim so the insurance company has to cover for the damages.

This thing gets worse when the scammer pretends to have certain injuries, so the insurance company also pays for medical expense. It is also possible that you have to file claim to your insurer; when you are considered at fault, there will be consequences such as increased premium fee and tickets. You are the victim, but it is difficult to prove that the actual accident was merely a fraud.

The easiest way to avoid such circumstance is to keep a safe distance between your vehicle and the one in front. Many modern cars are equipped with cruise control to help the vehicle maintain appropriate speed and perform braking to prevent rear-ending another vehicle as well as being rear-ended.

2. Vehicle Dumping

In difficult situations, people can find many ways to make money even if it is cheating other people or car insurance company. One of the easiest ways is to dump a car by burning it, leaving it somewhere no one else can find, or even selling it, and then file a claim that the vehicle is simply stolen. The best chance to get more money is when the vehicle is stolen; it means the scammer earns money from the sale and insurance settlement.

3. Exaggerated cost of repair

In this case, the scammer is the mechanic who repair damaged car. After an accident, you must take the damaged vehicle to a repair shop. The scam is committed by using cheaper parts and writing more expensive parts in the service history or report. It can be dangerous for you when the damaged parts are replaced by unsafe, unproven, non-recommended parts which are usually cheaper indeed. The insurance company will also need to pay the exaggerated cost after you file a claim.

4. False Address

Insurance premium is determined by many factors including address or where you live. Insurers often use statistics such as criminal or theft rates to help with the calculation. Certain areas where theft rates are considerably high, the average price for minimum liability requirements can be high too. In some cases, drivers register their vehicles in other places different from where they actually live.

5. Fake Injury

As previously mentioned, fake injury often comes with fake accidents. The scammers usually report some conditions such as phantom pain, whiplash, or other types of injuries that are usually difficult to see even after an X-ray. It is easier to commit the fraud when the scammers also work with doctors who check their injuries following an accident.

They can file claim to the insurance company about any injury (even if it is fake) to get more money for medical expense. If you are involved in the accident, the scammers may also personally ask you to pay for medical cost as well. One way to avoid this is to report all accidents to the police, although it is only a minor incident. The police can make official records which include all injuries suffered. Insurance company will also see the official reports by the police to compare their findings.

6. Airbag and Windshield

Airbag is one of the most commonly damaged parts in your car after an accident. Airbags are safety features and they need to function well all the time to prevent severe injury. There is always a possibility that a scammer-mechanic fills the airbag compartment with other objects, such as packing peanuts, to keep the sensors functioning. Another common fraud comes with windshield replacement. Scammers are always in the right place at the right time, for example after an accident.

A person may approach you while you are standing on the road and check your vehicle. This person will probably inform you that the windshield needs replacement, and everything will be covered by your insurer. Do not produce your insurance information to such person; he/she may file many claims under your name. As a result, the insurance company may cancel your policy. It is best to always consult your insurer or insurance agent about anything related to accident.

7. Towing Truck

Tow truck frauds happen in very similar way to that of windshield replacement. A tow truck may say that the service is provided by third-party company that works with your insurer. Until you can confirm that information with your insurance company, do not accept the help. If that is a scam, you can end up paying hundreds or probably thousands of dollars for the services.


Street Talk

No comments present
You May Also Like
Travel Competitions: Are They Legit?
Everyone loves a good travel competition, and your chances of winning an amazing trip or cash prize can be pretty good, especially if the contest requires a little work on your part to enter. If you’ve ever been curious about what happens behind the scenes of a holiday competition, you…
By: Frederick Holm in  Insurance   Jun 01, 2016  
0
  Likes: 0

Behind the Scenes Of Facebook Travel Competitions
If you’ve ever entered an online contest, you may have wondered why companies are willing to offer fabulous trips and other big prizes in exchange for simple Likes or Shares. What could possibly be in it for them? As part of their marketing strategy, it is not unusual for brands…
By: Frederick Holm in  Insurance   Jun 01, 2016  
0
  Likes: 0

Is Mobile Phone Insurance Essential?
If you’re looking for a good mobile phone or have just signed up for it or even upgraded your handset, there are chances that someone has tried to sell you mobile phone insurance. But the important question is do you require it? You perhaps need to consider buying mobile phone…
By: Shubrajit Dash in  Insurance   May 31, 2016  
0
  Likes: 0

Sussex Insurance And Its Concerns
The Sussex Insurance Company top concern is customer service. An organization acknowledges when you buy their policies and you put your trust in them. With fitness and caring a company makes an effort to match that trust. A Company’s staff is train to help you with your inquiries and concerns…
By: anamzara in  Insurance  >  Commercial   May 28, 2016  
0
  Likes: 0

Celina Insurance Focus
The Celina Insurance Group focuses on serving autonomous operators and policyholders; an organization work to make simple-to- use innovation, to develop partnerships and give genuine feelings of intelligence to the general population. Throughout the years, a group has grown by offering better administration than its specialists and policyholders.The different products…
By: anamzara in  Insurance  >  Travel   May 28, 2016  
0
  Likes: 0

We Insure
Water Damage You may not realize it, but water damage is the most common reason people make claims on their home insurance policy. This is a common loss, especially for older homes at risk for bursting pipes and leaky appliances. While most carriers provide coverage, some carriers exclude or limit…
By: Randy Marzullo in  Insurance   May 20, 2016  
0
  Likes: 0

Should I Get My Child Life Insurance?
Now we all know the concept of life insurance and its application to our adulthood, but what about life insurance for children? Many will reject these ideas, calling it morbid but if we consider it once, it is not entirely a morbid question. In fact, it may be a great…
By: Mikhail Juntilla in  Insurance   May 19, 2016  
0
  Likes: 0

Amigo Insurance And Its Services
Amigo Insurance Company offers the sort of quality administration you ought to anticipate from your neighborhood organization of Insurance. Pause for a minute to peruse more about a company office and their rationality of extraordinary client service. As an autonomous insurance organization, a company represents considerable authority in giving people…
By: anamzara in  Insurance  >  Commercial   May 09, 2016  
0
  Likes: 0

Hix Insurance And their Benefits
If you have not heard about the Hix insurance, for their insurance of health many people purchases this exchange. Through their managers, the vast majority get Hix insurance. In any case, individuals without this choice know how to now search for insurance of health on trades.They also have an alternative…
By: anamzara in  Insurance  >  Health   May 05, 2016  
0
  Likes: 0

Stay Up to Date on the Road With Fta’s E - learning Courses
One of the things that haulage companies must do if they want to maintain a competitive edge is ensure that their employees are all fully trained and aware of the changing rules and regulations as well as any new developments in the logistics industry. When training involves office staff, technicians,…
By: Frederick Holm in  Insurance   May 05, 2016  
0
  Likes: 0

When Short - term Health Insurance is A Smart Solution
Since the health law took effect, short-term health insurance plans have become very popular, especially among young adults, people who have a gap in employer insurance or those who have missed open enrollment under the Affordable Care Act. There are a few major reasons why this plans are appealing: -…
By: Nash Bauder in  Insurance  >  Health   May 04, 2016  
0
  Likes: 0

State Life Insurance And Its Policy Plans
The working of state life insurance company is with the point of view to encourage different customers. A company main objective is to provide benefits to their customers and shield them as of several of unforeseen harm by recommending the appropriate policy plan at reasonable price. A company is offering…
By: anamzara in  Insurance  >  Car Auto   May 02, 2016  
0
  Likes: 0

Surf Around the World: RTW Itinerary Inspiration
Have you heard of the “year of the endless summer”? It’s continual travel to warm and sunny destinations, following the summer season as it blossoms in various places at different times around the world. It’s a year without winter! If you are looking for a round-the-world travel itinerary that will…
By: Frederick Holm in  Insurance   Apr 26, 2016  
0
  Likes: 0

Everything You Need To Know About Round - the - world Tickets
If you’ve ever dreamed of escaping the daily grind to travel the world, you are not alone! Depending on where you want to go and how long you have, a round-the-world ticket pass may just be what you are looking for. As a traveller myself, I know the importance travel…
By: Frederick Holm in  Insurance   Apr 26, 2016  
0
  Likes: 0

Round - the - world Trip Inspiration for the Hiking Enthusiast
If you are a hiker, a round-the-world adventure is going to look a lot different than a whirlwind trip to the big cities around the globe. After booking your round-the-world flight pass, updating your passport and securing annual travel insurance, you’re going to want to look into the places you…
By: Frederick Holm in  Insurance   Apr 26, 2016  
0
  Likes: 0

Article Views: 792    Report this Article