In an attempt to find cheap car insurance quotes, most drivers tend to fall into fraud they rarely expected. This could prove costly when you want to file a claim since you risk missing the expected compensations. That’s why you should acquaint yourself with the common auto insurance frauds before taking up a coverage.
Actually, auto insurance fraud takes place in a variety of ways. From omitting information on an application to staging a full-fledged car accident, drivers are still coming up with more creative ways to scam insurance companies or consumers. Below are the general auto insurance fraud types you should know:
Car Dumping
Car dumping auto insurance fraud occurs when someone intentionally abandons their vehicle. They then proceed to file a stolen vehicle claim with the insurance agency as a way to collect money through a settlement or sale of the car.
Drivers abandon their cars in a number of ways, such as setting it on fire, pushing into a lake or claiming it was sold. Car dumping is more rampant during economic downturns, as people try to find quick financial fixes.
Staged Accidents
There are different ways criminals partake in fraudulent activity with staged accidents, including hard braking so they slam into their car or they wave you through and then crash into you. Drivers unknowingly become victims of fraud when they’re involved in an accident or collision and the other driver makes fraudulent claims with your insurer.
Staged accidents are extensivein urban areas, although they can happen anywhere. With staged accidents, the criminals most target wealthier communities, where there is an assumption of better insurance. This mostly happens to newer vehicles, rental cars, and commercial vehicles.
The Bottom Line
Indulging yourself in an auto insurance fraud will only end up tarnishing your reputation. And when this happens, you will have a difficult time in lowering your auto insurance premiums in the future.
To avoid this, try as much as possible to shop around for cheap car insurance quotes. Be sure to compare quotes from multiple local and national insurers before choosing one.
