Auto Insurance Ripoffs
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by: SusanTanner
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Word Count: 397
When thinking about car insurance scams, you may be thinking about the large companies that collect your monthly premium and then don't pay out on legitimate claims. However, the majority of auto insurance scams actually come from the person paying for the insurance. Ever wonder why your car insurance quote is as expensive as it is? Below, we will go over a few of the most common car insurance scams:
How about someone conveniently making a claim just as a major part is about to wear out? For example, just as the car's engine hits the 150,000 mile mark, an accident occurs that requires the engine to be replaced.
Other dishonest drivers stage a low speed accident, and then claim thousands in medical bills, sometimes going so far as to claim permanent disability.
Taking this a step further, the scammer may even bring a few friends along for the accident, and then claim that these passengers also suffered injuries. The friends settle for a goodly sum, and then give the primary culprit a percentage of their take.
Probably the most common form of insurance fraud is inflicting additional damage after an accident. The owner, wanting parts to be fully replaced instead of just repaired, will intentionally cause irreparable harm to their own vehicle.
Finally, it may not be the owner of the car but the repair shop who devises the scam. Some shops will drastically inflate the costs of repairs, reasoning that the money isn't really coming out of anyone's pocket.
Insurance companies that provide auto coverage have a few defenses against scams. One is the use of deductables. Since the insurance holder has to pay out of pocket the full amount of the deductable before the company has to pay anything, this theoretically reduces the incentive to use insurance. Second, making a claim against your insurance can result in a significant increase in premiums, and this increase can be applied for years. Again, this discourages frivolous and fraudulent use. Finally, fraud is a criminal offense, and offenders can be prosecuted. Those convicted may face jail time.
In the end, though, the people who are hurt most by fraud are the innocent people who do nothing wrong. They are the ones who have to make up for fraud losses in the form of higher premiums. Because every auto insurance quote has some amount factored in for fraud.
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To find out exactly how I got carinsurance, visit my website about automobile insurance
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