What is car insurance fraud?

The broad definition of car insurance fraud is any fraud committed against a car insurance company. Consumers or agents of the insurance company can engage in scams. Money lost to scams is then passed onto the consumer in higher premiums, up to an average additional $700 per year. If you are worried about your premiums, it may be a good idea to reevaluate your current plan and look at other <a href="https://www.moneygeek.com/insurance/auto/best-car-insurance-guide/">car insurance companies</a>. <a href="https://www.moneygeek.com/insurance/auto/compare-quotes/">Compare their auto quotes</a> and decide which one has the most affordable coverage.

How do you report a car insurance fraud?

If you are aware of a car insurance scam, it’s best to report it and have an investigation started. There are several places you can report the insurance fraud scheme: The fraud department of the car insurance company in question <a href="https://www.nicb.org/how-we-help/report-fraud" target="_blank">National Insurance Crime Bureau (NICB)</a> <a href="https://insurancefraud.org/" target="_blank">Coalition Against Insurance Fraud (CAIF)</a> <a href="https://content.naic.org/" target="_blank">National Association of Insurance Commissioners (NAIC)</a> Your local FBI office

How do you know you were involved in car insurance fraud?

Sometimes, you might not know you’re a victim of car insurance fraud. Here are some signs you may see that can point towards a fraudulent claim scam: The person is unusually knowledgeable about the accident process, including correct terminology and the ins and outs of <a href="https://www.moneygeek.com/insurance/auto/how-does-car-insurance-work/"> how car insurance policies work </a>. A high history of claims in a short period of time. An accident occurs soon after a car purchase or registration, or after <a href="https://www.moneygeek.com/insurance/auto/what-is-full-coverage-comprehensive-collision-insurance/">full coverage</a> is added. Multiple injuries or extensive vehicle damage without a valid police report. Attorney letter of representation filed the same day or soon after the accident occurred.

What happens if you lie to a car insurance company?

You might not think a little white lie hurts anyone, but if you’re caught, it could have serious implications. Insurance fraud costs billions of dollars each year, and you could face: Car insurance application denial Inability to get car insurance in the future Fines and penalties Jail time and/or criminal penalties (plus a criminal record) Claim denial Increased insurance premiums It’s not worth the risk of getting caught and charged if you commit soft insurance fraud by lying on the application or overstating your car claim.

Common Car Insurance Scams

Name: Common Car Insurance Scams
Item: Common Car Insurance Scams
Author: Jessica Sillers

ByJessica Sillers

Contributions by3 experts

Updated: March 1, 2024

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About Jessica Sillers

Mandy Sleight is a writer for MoneyGeek and has been an insurance agent since 2005. As a freelance writer, she uses her vast knowledge of the insurance industry to create informative, engaging and easy-to-understand content for consumers. Her work has been featured in Market Watch, Kiplinger and other major publications.

Jessica Sillers writes about finance, business, travel and parenting for various businesses and publications. She lives with her family in the greater Washington, D.C. area. Learn more about her work at www.dcfreelancewriter.com.

sources

FBI. "Insurance Fraud." Accessed December 2, 2020.
National Insurance Crime Bureau. "Prevent Fraud & Theft." Accessed December 2, 2020.
National Insurance Crime Bureau. "Staged Auto Accident Fraud." Accessed December 3, 2020.
National Insurance Crime Bureau. "What to Watch for to Avoid Becoming a Victim." Accessed December 3, 2020.