Auto Insurance Fraud

Auto Insurance Fraud

Owning a car is not an easy task; one must care for its maintenance and other problems. Also, there is a constant risk of damaging your car. The longer distances it covers, the greater the risk for it to be damaged. Car insurance is something that comes to help in case the vehicle is damaged in an accident or stolen. In many states car insurance packages are obligatory. However, some dishonest people make profits by car insurance. Very often people stage car thefts or accidents to gain money from the insurance company, this is auto insurance fraud.

Auto insurance fraud also involves filing illegitimate claims against other drivers; this is usually done by a group of scammers. These people file claims that are false or not related to any car accident. They may also exaggerate their losses or injuries.

There are said to be two types of car insurance fraud. The first type of auto insurance fraud involves destroying the vehicle or organizing a theft as if the vehicle has been stolen and then burnt. All this may be planned and performed by the car owner himself or he may hire someone to burn the car or to steal it. The second type of car insurance fraud involves staging car accidents to inflate the results later on. For example, a group of scammers decides to organize an accident where one car hits the other one and escapes and the owner of the remaining car claims he is not to be blamed for the accident and requires money for the losses he has suffered. The owner of the damaged car starts inflating the passenger’s injuries to get as much money as he can.

Auto insurance fraud is a frequent phenomenon that occurs throughout the United States of America. However, the economic conditions of the states largely influence this type of fraud, as it is usually concentrated in the areas with poor economy.

Auto insurance fraud is a real disaster for the US, as it results in lots of injuries and very often takes the lives of innocent people. To cut the number of car insurance fraud different tactics are now being practiced, for example, huge penalties and imprisonment for insurance related fraud.