Creative Auto Insurance Fraud

Tuesday, May 27, 2014

Insurance fraus hurts everyoneYou may not realize it, but insurance fraud is common.   While this type of fraud may seem like an easy way of making a few extra bucks, people tend to ignore the long-term consequences. Since there are a few people out there who try to scam insurance companies, the negative effects are suffered by the masses. Many honest customers have their claims denied under suspicion of fraud. Fraud also contributes to an increase in premium rates.


As insurance companies become more aggressive in screening claims for potential fraud, people trying to scam companies are becoming more creative.

Dumping Of Vehicles

Some owners resort to this method of insurance fraud. Although this is quite common, it does become difficult to track at times. Owners dump their vehicles or dispose them off in lakes, or set them on fire. Once the vehicle is destroyed, they claim that their vehicle was stolen. Insurance companies then have to compensate the owner for the cost of a new vehicle or something similar.

This is usually done by owners who want to replace their vehicles. Owners even resort to such methods after the company has denied a previous claim. This may gain such vehicle owners temporary benefits, but it has long-term disadvantages.

Staging Accidents

To claim insurance or to have minor repairs done to their vehicles, people often stage accidents. They deliberately take a wrong turn along the curb and hit another vehicle or something of the like. Some owners may brake aggressively in front of another car to achieve a rear-end collision. This is all done to file an insurance claim. There is a constant increase in this type of insurance fraud. Some people will even inflict damage to their vehicle with a hammer or iron rod in order to get a replacement or repairs.

So, if you’ve ever wondered why your auto insurance may be high, think about the insurance companies and the many cases of fraud they have per year.