Car insurance fraud is a crime that is committed when one acts with the intention of creating a situation, where one can make a claim against his or another driver's insurance company. Car insurance scams cost insurance companies billions of dollars every year. Unfortunately, car insurance fraud affects you whether you participate in it or not.
There are some common kinds of car insurance fraud that have been experienced. They are as follows:
1. To fake that the car is stolen: One of the most common sorts of car insurance fraud occurs when someone simply parks their car somewhere secluded or has someone takes the car and hide it, and they report their car was stolen. It takes few months for the insurance company to pay on this claim in this situation. The person, who reported their car as stolen, uses the money to pay off their car, if they owe money on it. Once the car is found, it belongs to the insurance company and company cannot force that the person to pay back the money and take back the possession of car. This increases the insurance company expenses, so that to cover the expenses the company may hike the premiums of the policies.
2. Shipping a car outside of the country: This type of fraud occurs when someone has a car for which there is high demand in another country. In such a situation, people who intent to scam, simply ship the car there and sell it, and they report to their car as stolen to the insurance company. In this case, they receive money from the insurance company as well as from the sale of the car.
This kind of car insurance fraud, known as hard fraud, is one committed by the car owner. There are also some 'soft frauds' that are made by the scammer to get the benefits of car insurance. Such scams are dangerous to the car insurance holder. These are so called because the scammers tend to falsify facts on the car etc. to mislead the insurance company and car owners. Some of the methods of the crime are mentioned here:
T bone: This is done by the criminal. This normally takes place on a desolate street. The criminal car will wait an intersection for a potential victim to drive up. Once the criminal sees a car, they speed up and collide into the victim's car as it passes through the intersection. A gang of bogus witnesses to the scammer's design in the area mislead the police and claim that the victim ran a red light or a stop sign.
The wave: In a crowded street with heavy traffic, when the scammer finds a car intending to change lanes, he gives a signal of consent by waving. Exactly when the car is changing the lane, he causes a collision with the car. When the police arrive, the criminal driver will disclaim any knowledge of the wave and thus falsifies the victim.
Side swipe: In a double turn lane, the fraudsters' car waits until the victim's car drifts into the far lane. At the moment, they will hit the gas, and side swipe the victim's car.
Paper Accident: Criminals, along with shady participants in an auto body shop, submit a fake claim for an apparition accident. They keep the claim under $1000, since car insurers will rarely investigate claim for that amount.
Auto insurers are aware of these frauds and should closely analyze the case taking the material facts and other sort of evidence into account. It would help save them from such threats.
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