How to avoid car insurance fraud
Car insurance fraud is a problem that affects everyone. Every year, insurance companies have to pay out billions of dollars in false claims, and those costs are passed on to consumers in the form of higher premiums. But there are things you can do to protect yourself from becoming a victim of car insurance fraud. By being aware of the most common types of fraud and taking some simple precautions, you can help keep your premiums down and make sure you’re not paying for someone else’s bad behavior.
Most Common Types of Car Insurance Fraud
There are two main types of car insurance fraud: Hard fraud and soft fraud. Hard fraud is when someone deliberately stages an accident or makes a false claim in an attempt to collect money from an insurance company. Soft fraud is when someone exaggerates their damages or injuries in order to get a larger payout from their insurer. Both types of fraud end up costing insurers—and honest policyholders—a lot of money.
Hard Fraud
Hard fraud is intentional and typically involves dramatic schemes, like deliberately crashing into another car or faking your own kidnapping. In some cases, hard fraudsters will even go so far as to destroy their own property! This may include burning down their house in order to collect on an insurance policy. Because hard fraud is so blatant, it’s usually easy for insurers to catch on and deny claims. But that doesn’t stop people from trying; according to the Insurance Information Institute, hard fraud accounted for $32 billion in losses in 2018 alone.
Soft Fraud
Soft fraud, on the other hand, is much more common—and much harder for insurers to catch. That’s because soft fraudsters generally try to stay within the bounds of the law by exaggerating existing damage or injuries sustained in an accident that was genuine. For example, they might inflate the cost of repairs or seek reimbursement for medical treatment they didn’t actually receive. And while soft fraud may not seem like a big deal, it can add up quickly; according to the National Insurance Crime Bureau, as much as 20% of all paid auto insurance claims may be fraudulent.
How You Can Avoid Car Insurance Fraud
To avoid being a victim of car insurance fraud is to be vigilant and aware of all signs. All signs that may not seem right should be amplified! If you’re in an accident, pay attention to the other driver’s behaviour and watch out for any red flags that could indicate they’re trying to commit fraud. And if you suspect someone might be trying to commit fraud against you, don’t hesitate to contact your insurer so they can investigate further.
Here are some specific things you can do to protect yourself:
* Take pictures at the scene of the accident! This includes pictures of any damage to your vehicle and the other driver’s vehicle. This will provide valuable evidence if there’s ever a dispute about what happened.
* Get the contact information for any witnesses who saw what happened. They may be able to provide valuable information about what really transpired.
* Be wary of anyone who asks you not to involve your insurance company or who tries to pressure you into settling outside of court. This could be a sign that they’re trying to commit fraud.
* Keep track of all correspondence related to your accident, including any emails or letters you exchange with the other driver or their insurer. This will create a paper trail that can be helpful if there are any disputes later on.
* Last but not least, trust your gut! If something doesn’t feel right about another driver or their behavior’s after an accident, there’s probably a good reason for it. Pay attention to your instincts and don’t hesitate to contact your insurer if you have any concerns..
Car insurance fraud is a serious problem that affects everyone who has auto insurance. By being aware of the most common types of fraud and taking some simple precautions, you can help keep your premiums down and make sure you’re not paying for someone else’s bad behavior’s. Thanks for reading!
