Auto Insurance Scams

Auto Insurance Scams
by Aiden Matthew Wilson

When thinking about auto insurance scams, you may be thinking about the large companies that collect your monthly premium and then don't pay out on legitimate claims. However, the majority of auto insurance scams actually come from the person paying for the insurance. Ever wonder why your car insurance quote is as expensive as it is? Below, we will go over a few of the most common car insurance scams:

One example of car insurance scams would be someone conveniently getting into an accident that requires the engine be replaced when it just hit 150,000 miles.

Another would be someone who arranges an auto accident at pretty low speeds, but then scams their insurance company for thousands in medical bills and perhaps even a settlement in civil court because the damage in their back just won't allow them to ever work again.

There have even been reported cases where the person in the accident will tell their auto insurance that several other people were in the car and were also injured. Then the friends will settle for fees as well and give the insurance holder a percentage.

Perhaps the most common auto insurance scam is the person who gets into a smaller accident, and because they want the parts replaced and not repaired, they inflict additional damage after the accident.

The last type of car insurance fraud that we will discuss is the type that comes from the auto repairer. If you've ever wondered why different repair shops will provide drastically different quotes for the price? It's because the money isn't coming out of your pocket, so they are pretty much free to provide whatever price they choose.

There are two different techniques that the car insurance companies use to combat the scams. The first is through the use of deductibles. Because each person knows that at least some of the cost will be coming out of pocket, it insures that you only use the insurance when absolutely necessary. Also, when you use your insurance, you price goes up to be insured and you wont get a cheap car insurance quote for up to 7 years from an accident. The last way they combat fraud is by making it a criminal offense that will put you in jail if caught coming fraud.

Overall, the varieties of different frauds are overwhelming. I find it quite sad that because some people choose to commit crimes such as these, your average person is the one paying higher rates and picking up the tab. It's not fair that we have to pay for the people who abuse the system but other people's fraud is factored into your auto insurance quote.