Car insurance fraud is an attempt to gain unlawfully from a car insurance policy by misstating facts or deliberately staging incidents. It is a common form of insurance fraud and consequently, providers of automotive insurance tend to be especially careful about processing claims. Drivers may want to be aware that certain kinds of claims can attract suspicion, even if they are legitimate, and an insurance agent can help them document a claim as completely and effectively as possible.
One method of car insurance fraud involves taking illegal steps to avoid paying high premiums. Drivers may register a car in a different location or with a different owner, for example. A common example is teen drivers who register their cars in the name of parents and list themselves as secondary drivers on the insurance policy to avoid the high rates for teen car insurance. Some insurance companies are familiar with this car insurance fraud tactic and may offer special programs to teen drivers to discourage it, such as allowing them to insure themselves legitimately on their parents' policies.
People may also lie about the circumstances of a claim, either to avoid liability or collect more money. People can claim they weren't driving at the time of an accident, may try to fold damage from a prior incident into a claim, or file multiple claims for the same accident. Tactics like claiming damages for a preexisting medical conditions or exaggerating time lost from work are other common examples. Insurance companies tend to send out inspectors for big claims, and they can usually determine the origins of damage to the car to see if it qualifies for coverage, as well as reviewing medical records to see if the origins of a claim are legitimate.
Car insurance fraud of another form involves staging or faking an accident to collect. In extreme cases, people may arrange the theft or destruction of a vehicle to collect the check for replacing it. In other instances, people can fake or stage accidents to collect insurance monies. A common example is a staged rear-end collision. Since the law generally deems the driver in the rear to be at fault, someone who slams on the brakes or pulls out in front of someone suddenly may be able to collect from the innocent driver's insurance, unless someone can prove the accident was set up.
When people file insurance claims, they should be accurate, honest, and complete. If there are questions, an insurance agent, fraud attorney, or mechanic can be consulted to get more information. Customers should not be alarmed if the insurance agency sends out an investigator, as this is usually routine. Collecting police reports and supporting documentation related to the claim is helpful for demonstrating its validity. Generally, as long as people make claims in good faith, they will probably not accidentally commit car insurance fraud.