Criminals sometimes place up mock Car accidents.
Auto insurance is a must for Safeguard from financially devastating circumstances. At the perfect least, liability insurance pays for damage you inflict on another motorist so you don't annex to salary outside of pocket. Depending on your policy, it much pays for vehivle repairs and medical bills whether you are in an accident. It may further come back you for Car theft. Unfortunately, there are criminals who catch function of this Safeguard.
Definition
Car insurance fraud wealth getting banknote from a automobile insurance corporation to which you are not legally entitled. The mode may purportedly be for van damage, personal injury or both. The fraud occurs when price in false for circumstances that are not valid. The say may be false by one subject, or it may be the duty of a category of scammers.
Types
There are two leading types of Car insurance fraud. The front involves destroying a vehicle or setting up a theft so the owner can collect income for the loss. Testament Hutchings, a sergeant with the Las Vegas Police Branch Car Theft Unit explains that cars are Frequently burned after a phony theft. Emily Friedman and Vanessa Weber of "Good Morning America" explain many auto insurance cases are centered in popular tourist destinations like Nevada, Florida, New York and Wisconsin.
Effects
Consumers end up paying higher rates for auto insurance because of fraud to reimburse insurance company losses.Location
Auto insurance fraud occurs throughout the United States, but it is most heavily concentrated in certain areas, especially when the economy is bad. Difficult economic conditions have a big effect on locations that are dependent on tourism. The owner may appropriate someone to effect it or torch the automobile himself and then remark it was stolen. The moment fraud type involves accident set-ups. All of the citizens involved in the accident may be in on the scam, or fraudsters may subsume an Virgin subject. They cause a collision and inflate their damage and injury claims.
David Corum, vice president of the Insurance Research Council, explains payments for fraudulent bodily injury claims were nearly $7 billion in 2007 and have gone up every year since 2002. This problem also poses physical danger. Innocent motorists who are targeted by scammers can suffer injury or death in an accident set-up.
Solution
Law enforcement can make a significant dent in the auto insurance fraud problem by cracking down on it. This is a positive ripple effect for consumers. Car Insurance Rates, an auto insurance website, explains car insurance rates in Massachusetts went down nearly 12 percent after the state insurance commissioner spearheaded an effort to stop fraud. Effective tactics include increased penalties and jail time for insurance-related fraud. Thomas Kristoffersen of the Insurance Rate insurance site explains auto insurers like State Farm, Allstate and Geico are also working on the problem.
