How to Protect Yourself Against Auto Insurance Fraud

auto insurance fraudMoney is a powerful incentive. It gives us the ability to pay bills, treat ourselves to a nice dinner, or take a relaxing vacation. Unfortunately, there are those who direct their lives based off of greed rather than honesty. It is those people that we must worry about the most.

What is Insurance Fraud

Insurance fraud is when an individual falsifies information to gain financial compensation that they are not entitled to.

To give an example, one party in a car accident can claim that the impact caused them back problems and are therefore entitled to medical payments made by the insurance company. As the payout increases so does the surcharge points on your record. This translates to a higher insurance premium when you go to renew.

This financial strain makes it all the more important to be vigilant of insurance fraud schemes and protect yourself accordingly.

How to Prevent Auto Insurance Fraud

  • Carefully document all damages made to your vehicle. This will make it harder for the other person to inflate their claim later on.
  • Collect written statements from all witnesses at the scene of the accident
  • Do not take advice from “helpful” people who appear at the scene and recommend a particular towing company or auto body shop. They may be in on the scheme.
  • Don’t place blame or admit fault.
  • Call the police so they can objectively gather the facts and file a police report.

Types of Insurance Fraud

Insurance fraud can be divided into two categories depending on the type of claim submitted.

A ‘hard fraud’ claim is one where someone deliberately fakes an injury or covered loss to illegally collect money from an insurance company. While a solo effort by many, some work as accomplices in this scheme of deceit to steal thousands – if not millions – of dollars.

A ‘soft fraud’ claim is one where people will make little white lies in effort to have the claim sway in their favor. An example would be an insured person claiming more damage to their vehicle than what actually occurred.

Regardless of whether or not the claim is ‘hard’ or ‘soft’, both types of fraud are considered crimes that can be prosecuted under the law.

Do you need a safe, reliable insurance agent that you can trust? Ease that stress away by calling H&K Insurance at 617-924-5600 today!