Auto Insurance Ripoffs

When you hear someone complaining about auto insurance ripoffs, they usually mean the high premiums that they have to pay every month, or the claim that didn't get paid. In reality, though, most insurance companies are reputable businesses. The scammers are most often the people who are buying the insurance, not the ones selling it. Surprised? You won't be after you read this.

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.

Some people will intentionally arrange to be in an accident. The crash is a low speed affair, but the driver claims that they have sustained major injuries and the insurance company has to pay out thousands in medical expenses. The scammer may even go so far as to claim that they have suffered a permanent disability that will keep them from ever working again.

Taking this a step further, the scammer may even bring a few friends along for the accident, and then claim that these passengers also suffered injuries. The friends settle for a goodly sum, and then give the primary culprit a percentage of their take.

Probably the most common form of insurance fraud is inflicting additional damage after an accident. The owner, wanting parts to be fully replaced instead of just repaired, will intentionally cause irreparable harm to their own vehicle.

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.

Auto insurance companies do have a few different techniques for combatting fraud. Deductables can discourage fraud to some extent. Since every claim involves the insurance holder paying out before the insurance company incurs any cost, that can prevent some people from using their insurance unless it's really necessary. Raising a person's rate after a claim is another disincentive. These increases can be steep, and applied for many years after the claim. Finally, fraud is a crime; offenders can find themselves in jail if convicted.

There are so many ways to commit auto insurance fraud, though, it is almost inevitable that the rest of us will be stuck making up for a few dishonest scammers. Auto insurance companies factor fraud into every quote, which is a sad state of affairs, indeed.

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