Understanding Auto Insurance Fraud

When money is involved, you can bet that someone will try to get some via a scam or some kind of fraud. This is true when it comes to auto insurance.

Auto insurance fraud can happen in a number of ways. It involves misleading an insurance company on purpose in order to receive some benefit, such as a payout or savings on insurance premiums.

Auto insurance fraud is something that affects all drivers. The losses generated by false claims causes insurance premiums to rise hundreds of dollars every year. For those who engage in insurance fraud, the penalties can range from denied claims to fines to jail time.

Types of Auto Insurance Fraud

There are two main types of insurance fraud:

• Hard fraud. Hard fraud involves overt behavior to secure money from an insurance company. It often results in jail time. False report of a stolen vehicle is a common fraud scheme. This involves making a falsified stolen vehicle claim on your comprehensive coverage by intentionally abandoning, selling, or destroying your vehicle. A staged accident is another type of hard fraud. This could include a driver slamming on the brakes so that you will rear-end them or planting a witness at the scene who may give false information stating that you were at fault.
• Soft fraud. This type of fraud is often the result of withholding information or exaggerating claims in an effort to save money or increase the amount of a payout. It is less overt but far more common than hard fraud. Overvaluing is one type of soft fraud. This means overstating the value of your car or property to receive a higher property damage payout. Exaggerated claims are also common. This refers to claiming damage that is not attributable to a covered accident in order to get a larger payout. Misrepresentation is also common. This means leaving pertinent information off of your insurance application, such as drivers or your true location, in order to get cheaper rates.

Don’t Falsify Information

 Lying to your car insurance company is a surefire way to get you in legal trouble. You could have claims denied or have your insurance policy dropped altogether. In more serious cases, you may have to pay fines or spend time in jail.

Car insurance is expensive. It can be tempting to lie to save money, but avoid the temptation. Instead, ask about discounts. There are many discounts available for teen drivers, older drivers, and those with multiple vehicles. Also, file claims wisely. Understand your deductible and the amount of damage caused by an accident.

Contact a Personal Injury Lawyer

Car insurance fraud can result in false claims, accidents, injuries, and more. If you have been a victim, make sure you seek physical and financial recovery.

A Houston car accident attorney from The West Law Office, PLLC can assist you with your case. We’ll ensure you get full compensation for your injuries. To schedule a consultation, call 281-347-3247 or fill out the online form.

Source:

thezebra.com/auto-insurance/insurance-guide/car-insurance-fraud/