Last month, two California men were arrested and charged with auto insurance fraud. The men were allegedly working together to bilk Farmers Insurance out of thousands of dollars in fraudulent repair bills. On at least 20 vehicles, they had allegedly over-billed for repair costs, used old vehicle parts, and billed the insurance company for new ones. It turns out that this and other types of insurance fraud are a big problem across the country, and especially in California.
We All Pay
Auto insurance fraud, which is a felony, is such a big problem that we all end up paying for it in our premiums. In fact, the National Insurance Crime Bureau (NICB) reports that each consumer pays an additional $200 per year as a result of insurance fraud. It is not the “victimless” crime that so many people tend to think of it as being. If auto insurance fraud weren’t such a big issue, each of us could be paying around $200 less in yearly premiums.
Auto insurance fraud can take place in a variety of ways, ranging from the lone driver on the road to rings of people working together. Some fraud rings are even believed to involve medical personnel, who bill for caring for auto accident injuries that never took place. With the fraudulent claims coming from so many directions, it becomes time-consuming for insurance companies to try to keep up on which are legitimate claims and which are bogus.
Types of Auto Insurance Fraud
Using old auto parts and billing the insurance companies for new ones is just one way that people engage in auto insurance fraud. There are many others, including filing for fake damages, vandalism and theft, and inflating the amount of damages to the vehicle, and even those involving arson.
Additionally, some fraudulent acts that could bring innocent and unsuspecting people into the scene. The “swoop and squat” acts, as they are referred to, involve people working together to create an accident. In such a scenario, one car would swoop in front of the “squat” vehicle, forcing the innocent driver to slam on its brakes and end up hitting their vehicle. Still others offer someone the right of way, force a collision, and later deny that they gave the right of way.
Protecting Yourself
It is important to realize that anyone can be a target when it comes to insurance fraud. Keep these things in mind as you deal with other drivers, and if you need to have your vehicle repaired. If you suspect insurance fraud, speak with your agent. Until this type of fraud is combated, it will continue to cost us all.
