The Problem Of Auto Insurance Fraud
Car insurance fraud has been a long standing problem but as criminals become more sophisticated they are constantly developing new ways to bilk the automobile insurance industry of millions of dollars each year. In addition to insider vehicle theft and planned collisions, individuals are also causing more damage to their vehicle after minor collisions. It can be difficult for insurance companies to prove that fraud is actually taking place because some of the accidents and thefts seem genuine. One type of auto insurance fraud that has been around for decades involves collisions that are planned. In most cases one of the people involved is oblivious to the fact that the accident was set-up. The most common type of accident like this is a rear-end collision. The person who intends to commit insurance fraud positions themselves in front of someone. In many cases they choose someone who seems preoccupied. This might be someone looking at a map or talking on their cellular phone while driving. Then the first driver slams on their brakes and the unwitting driver behind them smashes the rear end of their car. Not only is there substantial damage but the driver will usually sue for pain and suffering because of injuries as well. Another well used type of auto fraud involves the individual who is the victim of an accident causing more damage after the fact. This can really only be done if the initial damage caused by the collision is minor. The person who intends to commit auto insurance fraud is involved in an accident where the other party claims responsibility. Since the damage is minimal they agree to exchange insurance information and leave it at that. At a later point, before contacting the insurance company, the individual who wasn't at fault causes more extensive damage to their vehicle so they can claim a larger amount. Since the authorities weren't called in the first place, it can be almost impossible to prove when the damage occurred. Vehicle theft, or making arrangements to have their own vehicle stolen is another type of motor vehicle insurance fraud that some people take part in. They pay someone to take their vehicle for a price. One they submit a claim to the insurance company they are given a check that reflects the current value of the vehicle. This is particularly common when it involves a car that is a bit older that may have serious repair needs. Instead of paying for the costly repairs or trying to sell the vehicle for parts, the individual decides to take part in this illegal activity. Being aware of the different types of auto insurance fraud can help innocent people who find themselves victims of this type of behavior. If someone does feel they've been a victim of this type of activity, they need to report it to the authorities. |