Types of Insurance Fraud  

Types of Insurance Fraud  

Staging an Accident 

Think no one will know if you intentionally jump out in front of a car in order to cash in on a sweet, sweet settlement? With the prevalence of dash cams, security cameras, and other recording equipment, the answer is much more likely than some fraudsters anticipated. Not only is staging an accident illegal, but it’s also a felony in many states. Big settlements usually only come from truly catastrophic injuries, so if you jump out last minute with the intent of staging something, you aren’t likely to incur the kind of injuries that would get you the amount of money you were desperately hoping for. While there are many people who have received life-changing amounts of money for a personal injury claim, those life-changing amounts of money are typically the result of life-changing injuries. Almost all personal injury victims say that they’d rather have a time machine and go back to before the injuries, than all the money they got in their settlement or judgment. 

Inflating a Claim 

When you’re filing a claim, you need to answer the questions honestly and to the best of your ability. You cannot claim that your medical bills totaled $60,000 when you know that they only totaled $10,000. Furthermore, assuming that the doctors aren’t helping you commit fraud, the insurance companies will eventually find out the true value of your medical bills. If you do not know how much your damages will total, that isn’t an open invitation to make an educated guess with some extra padding. Knowing the exact amount of your damages as well as the compensation that you’re entitled to may be a tricky process. A personal injury attorney can help you understand all the benefits you may be entitled to, as well as put together a settlement opportunity to help advocate for you to the insurance company. 

Premium Theft 

Premium theft occurs when you purchase insurance, but the insurance agent never sends the funds to underwriting. Instead, they keep the premium for themselves. Victims of premium theft believe that their payments are paying for their insurance policy when they’re actually going to the crooked insurance agent. This does mean that the victims of premium theft are not insured. If you are in an accident, and it turns out that you do not have insurance because of a crooked agent, you can be exposed to financial liability after a car wreck. If you purchase insurance, make sure that you get an insurance card in a timely manner. These days, many insurance companies have apps you can download. Many of these apps allow users to have proof of insurance on the app. Any time you switch insurance, it’s always a good idea to verify that you have coverage before you start driving.  

Application Fraud 

When you apply for insurance, you have an obligation to be honest on your application. While there are some lies you won’t be able to get away with, there are other lies that the insurance company may not be able to detect immediately. For example, if you lie about your age to get lower premiums when filling out your insurance application, the insurance company will probably find out about that. However, if you claim that you only drive 1,000 miles per year when you actually drive around 10,000 miles per year, the insurance company won’t be able to verify that. Lying about how much driving you do in order to decrease your premiums sounds like a pretty sweet deal. However, in the event of a collision, insurance companies can check your odometer. If it turns out that you’re driving much more than you say claimed in your application, the insurance company may use that as an excuse to deny coverage. 

False Claims 

Sometimes scammers fraudulently make claims against the insurance companies of other people. If someone calls you to inform you that there’s been a claim against your insurance, but you know you haven’t been in an accident, you could be the target of a scam or a victim of fraud. Scammers do sometimes impersonate insurance companies, but there are times where the person on the other end of the phone really is an insurance agent, and another person really did make a claim against your insurance (albeit fraudulently). If someone has made a fraudulent claim against your insurance, the worst thing you can do is nothing. When you get a call notifying you that there’s been a claim made against you, but you know you haven’t been in an accident, hang up the phone and call the insurance company yourself. Make sure you dial the number listed on your insurance card. Do not call a number that the person you talked to gave you—it may not be a legitimate insurance agent. If a person has fraudulently made a claim against you, you will need to let your insurance company know. They may ask for pictures of your car, as well as information that can help prove that you were not involved in the accident.