Auto Insurance Fraud
Auto insurance fraud is a big problem, with auto insurance companies paying out roughly $5 billion each year. This number seems concerning, but the bigger issue is that people are using this money to cover the costs of their own crimes. To combat these crime rings, insurance companies have put in safeguards to prevent fraud.
Yet it's difficult for the average person to distinguish between an "accident" and a staged "accident." And while most people don't want to be scammed of their health care dollars by insurers trying to minimize expenses, they're often unaware how easy it would be for them to fall victim.
To combat this, rest assured that there are auto insurance fraud prevention tips to help you avoid being scammed out of your hard-earned money.
Prevent the Scam of Your Health Care Dollars: Get an auto insurance quote. Learn more about what's covered by your policy and what's not. Shop around for a better rate. Once your policy is in place, you can also have it reviewed if you think it's wording may be unclear or ambiguous so that you know exactly what's covered.
What to Look Out For: Look for an auto insurance quote with fine print that says something like "policy can be canceled at any time without notice. This policy is not valid in the state of California."
Signs of a Scam: You receive an auto insurance bill that's unusually high and/or includes costs you didn't know about. The insurer won't accept your claim. If you don't hear from them, call them and ask for clarification.
How to Fight It: If the insurer doesn't make it right, contact the Federal Trade Commission (FTC) or even visit their "Auto Insurance Scams" website for more information.
Prevent the Scam of Your Home Insurance Dollars: Get an auto insurance quote before purchasing a home. Although many people believe they're being covered by their home insurance policy with their auto insurance, it's rarely true. Learn more about what's covered by your policy and what's not. Shop around for a better rate. Once your policy is in place, you can also have it reviewed if you think it's wording may be unclear or ambiguous so that you know exactly what's covered.
What to Look Out For: Avoid any auto insurance quote that says something like "this policy has a clause B which states 'this coverage does not apply to the property described herein.' In this case, clause B applies to the property described herein and removes coverage." If you see something like this, shop around for a company whose policies are clearer.
Signs of a Scam: You receive an auto insurance bill that's unusually high and/or includes costs you didn't know about. The insurer won't accept your claim. If you don't hear from them, call them and ask for clarification.
How to Fight It: If the insurer doesn't make it right, contact the Federal Trade Commission (FTC) or even visit their "Home Insurance Scams" website for more information.
Prevent the Scam of Your Business Auto Insurance Dollars: Get an auto insurance quote before purchasing commercial or business auto insurance for your business vehicles. Watch out for auto insurance quotes that are much lower than rates for individuals, because they're most likely scams. It's like comparing apples to oranges.
What to Look Out For: Watch out for statements like "this policy is not valid in the state of California." If it's not valid where you live, it's a scam.
Signs of a Scam: You receive an auto insurance bill that's unusually high and/or includes costs you didn't know about. The insurer won't accept your claim. If you don't hear from them, call them and ask for clarification.
How to Fight It: If the insurer doesn't make it right, contact the Federal Trade Commission (FTC) or even visit their "Commercial Auto Insurance" website for more information.
Prevent the Scam of Your Health Care Dollars: Get an auto insurance quote before purchasing individual health care coverage. You don't want to be like one consumer who shopped for health insurance and found out he was buying a bogus policy. The company turned out to be an auto insurance scam and he didn't find this out until after filing a claim which was denied.
What to Look Out For: Make sure that any health insurance policy you purchase doesn't have fine print that limits coverage or uses ambiguous language. If you don't see anything obvious that limits coverage, call the state insurance commission, where you live, and ask what they're seeing in auto insurance fraud right now.
Signs of a Scam: You receive an auto insurance bill that's unusually high and/or includes costs you didn't know about. The insurer won't accept your claim. If you don't hear from them, call them and ask for clarification.
How to Fight It: If the insurer doesn't make it right, contact the Federal Trade Commission (FTC) or even visit their "Health Insurance Scams" website for more information.
Prevent the Scam of Your Business Auto Insurance Dollars: Get an auto insurance quote before purchasing business auto insurance. Watch out for auto insurance quotes that are much lower than rates for individuals, because they're most likely scams. It's like comparing apples to oranges.
What to Look Out For: Watch out for statements like "this policy is not valid in the state of California." If it's not valid where you live, it's a scam.
Signs of a Scam: You receive an auto insurance bill that's unusually high and/or includes costs you didn't know about. The insurer won't accept your claim. If you don't hear from them, call them and ask for clarification.
How to Fight It: If the insurer doesn't make it right, contact the Federal Trade Commission (FTC) or even visit their "Business Auto Insurance Scams" website for more information.
Prevent the Scam of Your Individual Health Care Coverage Dollars: Get an auto insurance quote before purchasing individual health care coverage. You don't want to be like one consumer who shopped for health insurance and found out he was buying a bogus policy. The company turned out to be an auto insurance scam and he didn't find this out until after filing a claim which was denied.
What to Look Out For: Make sure that any health insurance policy you purchase doesn't have fine print that limits coverage or uses ambiguous language.
Conclusion:
We hope this helps you avoid auto insurance scams. We know how important it is to keep your auto insurance policy in good standing and we want to do everything we can to help you keep it that way.
For more, check out our other resources for car owners: How To Pick A Good Car Insurance Company, How To Spot a Scam When You Buy Auto Insurance And The Best Car Insurance for Your Needs. For more on home and business insurance, explore topics like: Homeowners Insurance – What Every Homeowner Should Know About Coverage and Liability, Medicare 101 for Homeowners: What Do I Need to Know About Medicare? And Business Auto Insurance – When You're Looking at Buying Business Auto Insurance.
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Auto Insurance Fraud