There are so many types of fraud going on today that it’s hard to keep up with all the latest news. Car insurance fraud is one that is not always reported in the news but it’s out there none-the less. Though most of the fraud is committed on the insurance companies, it contributes to the overall cost of insurance, so it hurts all of us in the long run.
Vehicle dumping occurs when the owner of the vehicle disposes of it and then claims it was stolen. Vehicles are often burned, dumped somewhere or even sold. Some scammers even sell the car before reporting it stolen so they can make money on the sale of the car and then make additional money on the settlement to replace the car.
False registration is another subtler form of fraud in which a car is registered in a different area than where it’s really kept. The object is to avoid higher insurance premiums if the owner lives in a high crime area or someplace where the insurance costs would be greater.
Repair shops are notorious for insurance fraud. Of course, not all auto repair shops are crooked, but there are some. Shady auto repair shops and mechanics sometimes use shoddy inexpensive parts when making repairs and bill your insurance company high prices for the parts. In some cases, insurance companies are billed for repairs that were never even done.
Airbag repair is often used as a way to scam insurance companies. This happens when mechanics don’t replace the airbag after an accident and instead stuff the compartment other things just to keep the sensors working. The kind of scam can lead to injury if the airbag is needed again and there’s nothing there.
These are some examples of car insurance fraud and although most are committed on insurance companies, we all pay in the end through higher insurance costs.