Significant Increase in Specific Auto Claims Becomes Questionable
Posted on May 12th, 2010
When it comes to auto claims, insurance companies have a pretty good idea of what kinds are made and how many there should be during a given time period. If there are a lot more specific auto claims being made, that could lead the company to question the validity of those claims. One of the ways that these same companies keep their low car insurance rates available is through the investigation of these claims, so they can stop any fraud that might be occurring.
When you get car insurance quotes, they’re based on information that the insurance company has and what you provide to the company regarding your driving record, the kind of car you have, and other factors. To get low car insurance rates, you need to be a good driver. If you have a lot of past auto insurance claims – especially if those claims were questionable – you could see your low cost car insurance disappear. Insurance quotes aren’t set in stone, and they can change quite quickly if the company feels you aren’t being honest.
Considering Fraud?
One thing you must know about fraud is where it can lead. First off, fraud is illegal, wrong and if not caught, karma has a way of coming back around to bite you. Investigators work very hard each and every day developing new ways to catch those committing this crime. Being caught in a fraudulent crime can lead to the entire claim lost, little chance of ever being able to buy insurance in the future, federal prosecution and even imprisonment. What many people assume is how much the Insurer knows about them. For all the Insured knows, prior property or vehicle inspections may have been done without you even knowing, especially with companies who sell insurance online. With all these risks mentioned, lying to insurance companies still seems to be on the rise, as evidenced by the changes that many of the auto insurance companies have experienced. Between 2008 and 2009, there were significant percentage changes in the following six auto claims:
Hail Damage Weather Claims
1. Hail damage. There was a 47% increase in hail damage claims seen between ‘08 and ‘09, leading insurers to question whether all of these claims were legitimate. Hail damage is relatively easy to see, but there are still ways to get money from an insurance company dishonestly, and hail damage claims appear to be among the most popular ways. Claiming the damage, getting a check, and not spending it to fix the car is common amongst those committing this insurance fraud.
Auto Glass Claims Rise
2. Auto glass. Like hail damage, auto glass claims saw a 47% increase during the time period studied. Damaging the glass in order to make a claim, then using the insurance money for another purpose is something that’s been done for quite a while. This is why glass coverage will continue to rise.
The Phantom Accident
3. Phantom accident. Some people will intentionally crash a car to make a claim so they can get the money. Others will report accidents that didn’t really happen – if they’ve purchased a car that’s already damaged, for instance. Most insurance companies used to check to see if there was damage to a car before they insured it, but there’s much less of that taking place now, since people can get insurance online. Phantom accidents went up 43% in a one-year period. This is more than likely the reason for increased local inspections by online companies.
Inflated Repairs
4. Inflated repairs. The cost of repairs is important, and there’s been a 33% jump in the number of people who’ve overstated how much the repairs on their vehicle actually cost. They do that to get a larger check from the insurance company, and then they simply pocket the difference in price.
Suspicious Comprehensive Claims
5. Suspicious hit while parked. Claiming that someone hit your vehicle while you were parked went up 33% between 2008 and 2009. The insurance company sometimes can and can’t prove that it didn’t happen so while some get away with this fraud claims, many wont.
Unperformed Repairs
6. Unperformed repairs. With a 31% increase, this is very similar to inflated repairs. The repairs that are performed are minimal and not all of what should really be done, thereby letting the consumer keep the rest of the money that should have been used to repair the vehicle.
Auto Insurers struggle because of dishonesty such as this. There are many other things that can affect car insurance quotes, but fraud is one of the biggest factors that can’t be controlled by driving record and other consumer-related issues. When it comes to getting low car insurance rates and exploring insurance quotes, fraud and questionable auto claims are factors that come into the rating process. Anything you can do, such as install an alarm system or Lojack, to set the Insurer’s mind at ease will help reduce your auto premium.
Resource: http://www.low-insurance.org/top/fraud-on-the-rise/
Florida Fraud Case http://www.low-insurance.org/top/florida-fraud-case/
Insurance Myths: http://www.low-insurance.org/top/top-10-insurance-myths/
Similar Posts:
- Auto Insurance Fraud Prevalent
- Auto Insurance Fraud in New York City
- Lower Your Insurance Costs With Summer Vehicle Maintenance
- Consequences of Auto Insurance Fraud
- Florida Auto Insurance Quotes: Bills Going Through
Tags: Auto Claims, Claims, Specific Auto, Specific Auto Claims
Filed under Car Insurance News |