Combating Vehicle Insurance Fraud

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Auto insurance policyholders are fed up of the annual increase in insurance premiums caused by policyholders who stage accidents to file a claim and get compensated by the insurers. However, certain measures should be put in place to combat this criminality, and everyone must play their role to make the fight a success.

Policyholders are not happy when they get a notice informing them of an increase in their auto insurance premium even when they have maintained a clean driving record over the years. A lot of us would think the companies are only trying to exploit their customers and make excessive profits: this is not the case. The major factor behind the consistent increase in premiums is the auto insurance fraud which increases insurers' cost, and this increase bounces back to policyholders in the form of higher premiums. A lot of people have turned this crime into a full-time business, and ranks the second most popular "White Collar" criminality in the United States; thousands of policyholder gets away with fake claims every year. Although most big insurance firms have created investigative units in a bid to curb this problem, only a hand full of the perpetrators is caught. If your premiums are becoming unaffordable, then get an online quote today.

Recent statistics reveals that motorists pay an excess of over $300 annually as a result of Car insurance fraud. The big question is "How do these criminals rip off their insurance providers?" Here are some common ways:

1. Policyholders Get Rid of Their Cars

This is very common. This occurs when a motorist abandons his car, most times in a lake, or set it ablaze. Such claims are difficult to investigate; the driver can simply claim they snatched his car. This makes it difficult for the investigators to carry out any meaningful investigation.

2. Made-up Report of Vehicle Theft

In the event that the owner sells the car before it was reported stolen, there are two outcomes: Firstly, compensation for the replacement of the vehicle and then the repayment of the actual sale of the first car.

3. Overstated Cost of Replacement and Repairs

This is common among repair shops. A repairer may fix a car with inexpensive parts but charge the insurance firm for high-cost parts. Some shops even charge thousands of dollars for an airbag that was actually not replaced. If caught in this act, the culprit may serve up to a year's jail term, coupled with a fine that runs into thousands of dollars.

Another popular insurance fraud is the "golden hammer." When a vehicle is involved in a minor accident, the policyholder uses a hammer to cause severe damage to the car so as to inflate the claim. If you notice any of these unwholesome acts, quickly report to the appropriate authorities, to make them pay for their dishonesty and this will curb the rate of insurance fraud in the industry.

4. Falsifying Personal Data Registration Form

Your zip code determines your insurance rates. A lot of people play smart by registering with false addresses with lower premiums. This contradicts insurance ethics, and if caught, your insurance package may be terminated. While filling the insurance registration form, ensure you fill your correct address.

5. Bloated Cost for Windshield Replacement

Have you ever experienced a situation where a mechanic you've never met before that time, approaches you, telling you the consequence of your cracked windshield? This is a big scam currently gaining grounds all over the country. These mechanics tell ignorant customers that they can fix the cracked windshield in few minutes, and their insurers will handle the bill. All they do in the real sense is to replace the windshield with a cheap one, and the insurer pays the full price. Don't be a victim. If you must fix your car, ensure you visit a certified mechanic.

Join the Fight against Auto Insurance Fraud

The issue of car insurance fraud has eaten deep into the insurance industry. However, with our little efforts, we can curb the problem to the minimum. If you notice any sign of insurance fraud, quickly file a report to your local insurance department.

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