No Fault Insurance Fraud ExplainedIn many states, there's a law in place that protects both auto insurance companies and consumers. It's no fault auto insurance which applies to accidents that are minimal in nature. How it works is that when an accident occurs where the monetary damage is below a prescribed level and the injuries are minor, it is deemed to be no-fault. This means that each party's insurance company pays for their driver's expenses. It sounds like a great approach to keep insurance costs low however the downside to this is the increase in the number of no fault insurance fraud cases.
This type of auto insurance fraud is steadily on the rise as criminals realize new and innovative ways to beat the system. In a typical case, several different people all work in tandem to pull off the scam. In almost every case, a doctor is involved. He or she is crucial to the scheme working. This particular type of insurance fraud is so costly because it involves medical expenses in many cases. A person will be involved in an accident for a fee. They may be a part of the plan from the onset, or they may be recruited to take part in the accident after everything else is planned. In most cases the person who will become the alleged "victim" of the accident, will be paid a set fee. The fee varies but in many cases it's rather substantial. The one and only requirement of the faux victim is that they have auto insurance. They are then involved in an accident. This may or may not be a real accident, depending on the insurance company involved and how thorough they are with checking claims. The accident is then reported to the police. This is an important step in the process as it creates a legal document that illustrates when and where the accident took place. The victim is then taken to the medical clinic or office of the doctor who is also taking part in the insurance fraud scheme. The doctor will examine the patient and then begin to set up a case file for them that will ultimately result in many visits and expensive treatments. In almost every case of no fault insurance fraud like this, the victim never visits a doctor beyond that first visit. It can be difficult to determine when no fault insurance fraud is taking place unless the doctor who is involved works on a case with the same auto insurance company several times. For this very reason most doctors have their partners in crime find willing victims who all deal with different insurers. Taking part in this type of scam, even as the innocent victim, is illegal. Although it seems appealing to many people because it is relatively easy to pull off, it costs everyone more money in increased auto insurance premiums. |