You may wondering is double dipping illegal? In addition to double dipping, there are various types of auto insurance fraud.
Auto insurance fraud refers when a person lies to the insurer for financial gains. Even if you’ve never been involved in these sleazy scams, auto insurance fraud will affect you. It’s difficult to pin down the cost of most insurance scam cases to motorists, since they often go unreported. Moreover, it’s difficult to spot an insurance fraud. For instance, is double dipping illegal?
According to industry experts, these auto insurance scams increases premium and slows genuine insurance claims. Additionally, these frauds can pose danger to innocent victims.
Law enforcement agents in New York claim that there are about one insurance fraud out of every three claims. This challenge may even be worse in cities like Los Angeles. Especially since reports from the National Bureau of Insurance Crime indicates that there are many questionable claims in that city.
There is another group that specializes in pursuing insurance fraud cases known as the Coalition against Auto Insurance fraud. This group tracks various insurance fraud cases reported in California, New York, Massachusetts, Michigan and Florida.
Continue reading this article and you’ll learning about insurance fraud in-depth.
Types of Auto Insurance Frauds
- Staged accidents
As per the National Bureau of Insurance Fraud, the number of staged accidents is increasing rapidly. Insurance companies across the United States reported an increase of 102% in this kind of fraud between 2008 and 2011. Some common kinds of staged accidents include; wave down, side swipe, panic stop, swoop & squat, enhanced damages and drive down.
- Windshield Restoration Rip-offs
In this case, a stranger reaches out to you at the parking lot. He/ she then claims that they’re with an auto glass company. He then informs you that they can offer you a new car windshield for free. But that is after you give then your insurance details. Sounds interesting, right?
However, these turns out to be a scam in most cases. And, it can post greater risks to the victim than most people realize.
For instance, the quality of the repairing work and the replaced windshield is not that good. Thus, you can be risking your safety. Additionally, since the scammer has your insurance details, they’ll submit false claims through your policy regularly.
Therefore, ensure that you avoid such offers. And if you want to replace your windshield, contact your auto insurance agent first.
- Auto Insurance Premiums Evasion
Some policyholders aren’t completely innocent on matters regarding insurance claims. This is because they deliberately mislead the insurance company by proofing false addresses when registering their cars. Thus lowering their auto insurance premiums.
Another related auto insurance fraud involves failing to include a new driver in the family policy, especially teenagers. These types of omissions and lies tend to affect the auto insurance industry. Also, premium evaders can be jailed for fraud or even lose their auto insurance coverage.
- Towing scams
In most cases, an amicable tow truck passing by after a breakdown or accident can appear like a God-send. However, if you did not call the tow, you’ll probably be charged for the tow.
There are various ways of protecting yourself from such incidences. If you’ve a road assistance, that is where you can get help if you need the tow. This will help you get reasonable pre-negotiated costs.
Additionally, your auto insurance policy can provide roadside assistance. You can use it after an incidents renders your car undrivable. But first inquire the limits of your policy on storage and towing before leaving the scene. If you’ve use another tow track, it’s good to call for one instead of using the truck passing by.
- Counterfeit air bags
More than 1 million air bars are inflated every year, thus saving many live during car accidents. However, during the repairing process, some air bags are replaced with fake ones. This can threaten a lot of lives.
So, if you need to repair your car after deploying the air bags, look for a reputable mechanic. Alternatively, go to an auto shop that’s approved by your insurer. Also, when purchasing a used vehicle, obtain a car report. This will tell you if the vehicle has either been salvaged or damaged in an accident.
- Agent Fraud
Most auto insurance agents tend to be honest. However, if you purchase an auto insurance coverage through a shady one, it may cost you. Shady agents steal your premiums and does not set up the insurance coverage. Thus, when an accident happens, you won’t have an insurance that can pay your claims.
How do you avoid auto insurance fraud?
The 1st step of avoiding insurance fraud is acknowledging that it exists. This will protect you from these scams. Other tips that will help you avoid these scams include:
- Reporting every accident to the police & obtaining the police report
- Avoid tailgating, thus protecting you from being exploited by criminals.
- Documenting the details of the car accident.
- Informing your insurer about the incident immediately.