If you’re like me, you are fed up with seeing your premiums rise each year. This is due to the fraudsters who create false claims in the insurance industry. While there are some steps that can be taken to reduce this problem, we all must take action and do our bit.
Many people are frustrated when their provider sends them notices telling them that their rates have increased by 5% or 10%, even though they haven’t had an accident or ticket for years. Many believe the company is greedy and trying to make as much money as possible. However, this is not true. Fraud in car ownership is one of the reasons that costs rise and are then passed on to consumers through higher rates. This crime is big business. It is the 2nd most widespread “white collar” crime in America. Each year, thousands of people get away with making false claims. Although nearly all the major carriers have established an investigative department to combat this problem, only a small percentage of criminals are ever caught.
Recent statistics show that fraud can cost drivers more than $300 each year. These shady individuals rip off drivers in many different ways. These are the main methods:
1. The owner abandons the vehicle
This is the most widespread fraud. This happens when the vehicle owner throws away the vehicle, or burns it. These claims can be difficult to prove as the owner may just claim that it was stolen. Investigators are not able to disprove many of these cases.
2. Fraudulent claim for a stolen vehicle
There are two kinds of games available if the auto was sold before a report was made that it had been stolen. The first is the settlement amount that will cover the replacement cost of your automobile, and the second the actual purchase reimbursement.
3. Inflated Replacement and Repair Costs
These scams are perpetrated by dishonest repair shops. Workers might use low-quality parts to fix your car, but then bill you the insurance company for more expensive replacement parts. Some companies charge thousands to replace airbags, while not even installing a new one. This can lead to a person being sentenced to up 1 year in prison and thousands of dollars in fines.
Another scam that is very popular is the “golden Hammer”. A hammer can be sued to inflate a claim if a car arrives with minor damage. Report any suspicions of fraud at an auto body shop immediately so that these criminals can be prosecuted and expelled.
4. Falsifying registration information
Your zip code will play a major role in how much you pay for insurance. False addresses are often used to get lower rates and less theft. This is not ethical and could lead to your insurance being cancelled. When applying for auto insurance, be honest about your actual location.
5. Bad Windshield Repairs
A stranger mechanic approached you in a parking garage and told you that your windshield was cracked and that you are in serious danger. This scam is being perpetrated by many people across the country. They claim that their insurance will cover everything, and they can complete the job in a matter of minutes. It is simply a scam with a cheap replacement windshield, which is then billed to the insurance company at full price. Do not fall for this scam. For all automobile repairs, make sure you only use a certified center.
Fight Back Against Fraud
The problem of insurance fraud is not going away any time soon, but we can do our part to help eliminate as much as possible. Contact your state department if you notice any of this happening. immediately to report the matter. This would help to reduce the cost of insurance for everyone, as criminals would be caught.