Owning a car, purchased with your own money, is right up there with investing in a home or starting a business for some people. However, if you are a first-time car owner, you should exercise caution and consult widely on how to go about it before committing to such a purchase. A second-hand purchase, unlike a new one that needs no fixing, can worry you a bit with some detailing work but your main concern should be handling the taxes, ownership change, and more importantly, car insurance.
If you’re looking to buy car insurance, EverQuote should be your starting point for affordable car insurance quotes. All you need is your zip code and to fill in a form and you will have a chance to do car insurance comparison from the comfort of your home or office instead of booking appointments with insurance agents across town.
EverQuote then simply matches you with relevant options based on your information. They will send you a car insurance quote via phone or email from local insurance agents in your area which you can now contact at your convenience.
Car insurance is mandatory to cover road accidents or dangers of any nature. But, there is another danger – car insurance fraud. This can be committed by either or both drivers and insurance companies. The FBI estimates the cost of all forms of insurance fraud to be about $40 billion annually, that’s excluding health insurance fraud.
What is Car Insurance Fraud?
Insurance fraud occurs when someone knowingly provides incorrect information to an insurance company for illegal financial gain. It may not be intentional and anyone can be a victim. When it comes to car insurance fraud, some scammers are after certain people to make them lose money or get them to prison. That is why you need to be very careful.
Who exactly can commit insurance fraud?
- Another driver
- A medical professional
- A repair person
- An insurance firm
How to Protect Yourself from Car Insurance Fraud
Knowing the existence of car insurance fraud is the first step to protect yourself; you’ll want to know how to avoid these scams. EverQuote is there to help you reduce car insurance fraud and educate the people about its impacts.
- Get to know your rights and responsibilities in your insurance policy and contact your insurance provider for any inquiry or clarification.
- Fill out keenly your insurance application forms and carefully check for any mistake.
- If you get involved in an accident, make a detailed record of all persons involved, and take pictures at the scene.
- Don’t sign any document or agree to any terms at the scene of an accident.
- Don’t hesitate to call the local police if you suspect car insurance fraud.
Never sign a blank insurance claim form. Be aware of bystanders, tow company insurance fraud, medical professionals, or auto repair shops that try to push you to go to a certain facility for service or treatment, or try to pressure you to file false claims
Here Are 5 Types Of Car Insurance Fraud
1. Staged Accidents
Staged accidents are increasing at a very high rate. They are carried out by those looking to commit insurance fraud. Linking a genuine accident to a fraud attempt is just as bad as failing to prove a driver intentionally caused accidents to defraud an insurance firm. Drivers stage car accidents to deceive Insurances Company and fraudulently walk away with compensation checks.
Most common types of staged crashes include:
- Swoop and squat: occurs when two vehicles trap a victim in a rear-end collision.
- Panic stop: A vehicle intentionally slams instant brakes on the car behind them, causing the tailing vehicle to rear-end them.
- Enhanced damages: some accidents are legitimate; however the not-at-fault driver causes increases damage to his or her vehicle.
- Drive down: When waiting to make a left turn, the victim is lured into turning early by an oncoming fraudster who waits and then proceeds to collide with the victim.
- Wave down: it happens when two vehicles set up a crash with a victim who’s given a signal that it’s safe to pull out.
- Sideswipe: A driver positions themselves so they can sideswipe another car that is using the inner left-turn lane of a dual left-turn lane intersection.
2. Application Fraud
Application fraud occurs when you knowingly provide incorrect information on an insurance application.
Understand that this only applies to intentional lying. People put incorrect information on their insurance forms all the time. It is not fraud if it was an honest mistake. It only becomes a problem when you knowingly make a false claim.
3. Staging a Car Theft
Some drivers intentionally contribute to car theft. They leave their car unattended for long periods. Others sell it and claim it has been stolen. All this constitutes faking a car theft. If the car is sold, then claimed to be stolen, the fraud can pay using an insurance settlement through the original sale of the car and replace the stolen car. Such fraudulent insurance claims are common nowadays. This is highly punishable and it can lead to two, three, or five years jail time, a $50,000 fine, or double the amount of the fraud.
4. Exaggerated Repair Costs After a Car Accident
This type of fraud is mostly carried out by dishonest repair shops. Make sure you research shops before. Some mechanics use used parts to make repairs. If they bill your car insurance company for new parts or they claim the work lasted longer, they’re committing fraud for financial benefit. This form of car accident repair insurance fraud is common in many shops that claim to be specialists. These staged shops may also exaggerate repair costs by overcharging a customer
5. Fake Airbag Replacement
Some mechanics usually don’t replace the airbag. Instead, they’ll stuff objects that can be compressed and weigh heavy enough to keep the sensors working, such as plastic bottles. This act is extremely dangerous to car drivers as these objects can cause serious injury or even death in case of another accident.
Why Car Insurance Is Mandatory
Insurance can offer peace of mind, especially when know you’re protected against the unexpected. You can find an insurance policy from the most credible insurers by practicing due diligence to verify all seller information below committing to a car insurance cover.
Many states require you by law that you have basic auto insurance that covers any liability arising from damages to the other people or vehicles. If you’re purchasing a car with a loan, you may also be required to add collision coverage which covers your damages
Car accidents and any other danger that is covered by car insurance can sometimes drag out if compensation disagreements, death, huge hospital bills, and court cases are involved. If such cases arise with bogus insurance, you are basically left speechless.
Even if you get away unscathed in a car incident, an insurance agent who steals your premiums can get away with this act by conning several clients. The Coalition Against Insurance Fraud is an anti-fraud alliance that is a prominent advocate against insurance scammers. They empower consumers to fight off fraudsters and learn to detect scammers before they become victims.
What to Consider When Choosing the Right Car Insurance
The majority of car owners, just buy cars and pick random insurers without knowing the details. This can cost you a lot of money.
Here are some tips that will help you find the right insurance policy to save money.
- Compare annual rates. Before you make the final decision on the insurer, compare prices. This will help you secure the best deal. There are several online insurance comparison providers like EverQuote that can help you pick the best.
- Pick a trusted insurer. Don’t rush to pick out the insurance company. take time to carry out research and make use of review to know more about the company. 5-star insurance will tend to have the best better.
- Be wary of scammers. Con men are always out to steal from you. Maintain good driving habits like maintaining a good distance between your car and the one in front of you. Scammers can stage fake accidents that can result in insurance claims against you.
To be on the safe side, make sure to:
- Maintain good credit.
- Set the right deductible.
- Report reduced mileage.
- Choose the right car.
- Take advantage of the discounts.
Insurance fraud can cause serious financial or bodily harm. When reviewing insurance policies be honest with your insurance provider to avoid misunderstanding and miscommunication.
Don’t lose money because of car insurance scams. With EverQuote, you can compare several quotes tailored to your budget.
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