The average American is an honest person and wouldn’t even consider
committing insurance fraud, right? Not necessarily. When you go to
compare car insurance quotes with multiple companies and you see that
all rates are higher than you are used to, you might be living in a area
with a high incidence of fraud.

There are a few people involved
in criminal rings set up to rig accidents and claim money for bogus
injuries or damage. But, it is much more common that someone involved in
an accident embellish their suffering just a little bit when they are
not at fault for an accident. After all, what’s a little “pain and
suffering” money from a huge insurance company?

Based on all the
fraud that occurs in some form or another, insurance companies have
lost about $18 Billion dollars. How do you think they make that up? Yes,
on your insurance premium, even if you are the most honest Joe out
there. The guy living three doors down is pretending to be out of work
for car injuries, yet you see him playing basketball with his friends;
he is causing you to see more increases as you compare car insurance
quotes.

Buildup

Higher costs for medical
bills and pain and suffering payments are going out to people who are
exaggerating their injuries. This represents a big portion of fraud; if
it is prevalent in your area, you will see prices across the board
increase when you compare car insurance quotes.

Staged Accidents

Staged
accidents typically involve several people in one car and a medical
“clinic” that bills for bogus treatments. Many times these bogus claims
include sore backs, strains and sprains—difficult to dispute or prove
from a medical standpoint. To compare car insurance quotes in these
areas that are more greatly affected you will see higher rates among all
your estimates. This is a bigger issue in no-fault or PIP states like
Florida, Michigan, Kentucky, New York, and New Jersey.

Underwriting Fraud

This
type of fraud happens when car owners falsify information in order to
reduce their premium. These can include under-reported mileage, fake
garaging addresses in areas that have lower premiums, non-reported
commercial use of vehicle, and unreported drivers living in household.

What to do?

Rather
than ignoring the issue, be aware of it. If you are aware, you might
see some insurance dishonesty going on around you. If this happens to be
the case, you can call anonymously to your state department of
insurance to report possible fraud. It is up to them to send
investigators to check. If everyone were to do this, Americans would see
a decrease when they compare car insurance quotes.