Car Insurance Fraud

 Car insurance fraud is a deception committed by the insured against and Insurance company, to benefit money.

   Insurance fraud ranges from lies telling about packing place, garaging service address, exaggerating minor accidents, and sometimes even staging accidents.
   Since fraud is a crime in all the states in the USA, insurers work hard to dictate all fraudulent activities.

Here are five (5) types of fraud to help the insurer survive if it happened to him.

   A hard fraud is a deliberate invention of a loss or accident by the insured to claim indemnity  from the insurer. This is a crime that can attract a prison term.

   - Sometimes an insured forces an accident unto another driver and a planted witness testifies the incident to the police against the driver who was forced into an accident. This fraud type is called staged accidents.
- Another type of hard fraud is when the insured plans for his own car to be stolen by an accomplice to either sell, destroy or sell in parts and then lay a claim to the insurer for an indemnity.

   This as a common practice is the habit to exaggerate legitimate minor claims to benefit more, or telling lies when applying for an Insurance policy, to pay less premiums.

- the insured sometimes fail to inform the insurer about all the drivers in the household. This type of soft fraud is called missing drivers.
- Another soft fraud is when the insured exaggerates the number and value stolen in a covered theft, or adds the already indemnified old claim to the new one. This is called over reporting.
- Also some insured use the address of other people who live in locations that benefit lower Insurance rates. They actually use their names and addresses to register and insure their cars. This form of soft fraud is called lies telling.

   Drivers or insured who practice Insurance fraud , be it hard or soft fraud have 5 ways of doing it.
   Let's take a look at the 5 ways.

   This is also called "owner give up". In this method, the car owner abandons his car wherever or burns it or sells it and then files a claim to the insurer that the car has been stolen. This theft method can pay off in 2 ways. Firstly, the car owner actually sells and keeps the money. Secondly the insurer indemnifies to replace the stolen car.

   Some car owners do false car insurance registration. They live in different locations and register their cars in different locations depending on the car insurance rates in those areas. For example, such scammers may live in neighborhoods noted as high risk zones for car theft. Such areas have high premiums. So such scammers then escape to register in states with low premiums, though living in high class states.

   After an accident, the driver repairs his car. During these repairs another method of car insurance fraud is manifested. The dishonest driver inflates the car repair bills. This is sometimes done by fitting second hand parts and giving them the prices of new parts, or giving a long period of time for work done on the car even though it was done for a short while, and sometimes even the used parts are priced higher the new parts.
   This repair cost fraud is committed for financial gains, which in itself is a crime.

   In this fraud method, the repair shop falsely claims to have replaced some parts like airbags, brake locks, or fire extinguisher etc, all meant for security. The National Insurance Crime Bureau (NICB) reports that sometimes repair shops actually change the effective good parts and fit in faulty ones. All this to swell the bill of the insurer.
   For preventive measures, some states like California have passed a law to penalize the use of faulty air bags in steering deployed cars with as much as 1 year in prison and 5000 dollars as fines.

   A windscreen protects the car users from air and dust particles. Insurance fraud is also practiced here. This method is practiced  when charlatans actually surprise drivers in their packing lot with complains that their windscreens are bad and can be replaced by an effective one at the expense of the insurer. The unsuspecting driver will accept and the scammer repairer will instead replace a good windscreen with a bad one  and still file an Insurance claim in the name of the scammed driver. This can be dangerous to the insured, because it can distabilize his car insurance coverage.

   If the insured is a victim of a car insurance fraud, he should inform the Insurance company. He should also call the National Insurance Crime Bureau and the state department of insurance. This is because car insurance fraud is a crime and even the insured may be charged with accomplice if he allows the fraud to be discovered by the insurer.

   If the driver or insured suspect fraud, let him immediately call the National Insurance Crime Bureau on 1-800-TEL-NICB to report it. This helps the insured from being scammed. Also the insurer should inform his insurer if he suspects fraud.
  These moves can protect the insured and others and also reduce the premiums.
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