Generally speaking, car insurance fraud occurs when a person or entity makes false insurance claims in order to benefit financially, obtaining compensation or benefits that they are not entitled to. Did you know that you can commit car insurance fraud by accident or become prey in a fraud perpetrated by another individual? Yes, while auto insurance fraud is more popular in its more egregious forms, an innocent mistake when filling out paperwork may be considered fraud.
Common Mistakes That May Lead To Car Insurance Fraud
It pays to be aware of common mistakes you can make that may lead to auto insurance fraud because something as innocuous as omitting an information regarding the use of the vehicle when filing a claim with your agent or insurance company can lead to a fraud case. Not listing all household members related to the policyholder is another possible omission that could lead to serious trouble. Even moving to or staying at another location should be made known to your insurance company or agent.
More serious cases of premeditated, fraudulent activity would include buying a policy after an accident had occurred, staging a car accident, intentionally causing a car accident, or reporting inflated repair costs.
Consequences of Fraudulent Claims
Whether it be accidental or not, being found guilty of auto insurance fraud may result in a policy cancellation or legal punishment. If you are fortunate enough to be spared legal sanctions, don’t rejoice just yet. Having a cancelled policy and driving without a valid coverage is extremely risky, and it would be wise to find a new insurer as soon as possible.
How to Avoid Car Insurance Fraud
One way to avoid accidental car insurance fraud is to work with a trustworthy and reliable agent who will purchase and maintain your coverage for you. Make sure to provide as much information to your agent as possible and double check for accuracy. It is much easier to obtain fraud-free car insurance coverage with the help of a trained professional than to buy insurance on your own. While you may save you a few dollars now buying a policy yourself, doing so might cost you in the long run when you need it most.
On the road, you can protect yourself from fraudulent activity by driving defensively. In case of a car accident, it is best to call the police. It would also be good to take pictures. If you suspect fraud, let your agent know right away so they can alert your auto insurance company. It would be advantageous to try to get witnesses to help you.
Being familiar with the risks of unintentionally committing, or becoming prey to, an auto insurance fraud, and taking the necessary precautionary steps to avoid one is not too difficult. Doing some research on the do’s and don’t’s can save you from legal consequences and a lot of stress. Remember to always keep your insurance agent updated on all pertinent information that could change your policy and, of course, always drive safely.