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Car insurance fraud explained

For some people car insurance can be a costly yet necessary option that you can do nothing about. Of course, when you have to give the last back for having your car insured this insurance becomes very annoying. Yet, there are many ways to cut down car insurance costs effectively and people tend to use them. Still, for a small group of people the most obvious and attractive measure for cutting car insurance expenses is playing against the rules or simply committing fraud. Most of use know people like that who tend to think that they are fooling the “suits” by filing false claims, messing with coverage and cutting premiums.

But the reality is quite different from what these people assume. On of the most common points in these peoples' statements is that car insurance companies have billions of revenues and no one will notice those $500 that someone got from filing a false claim. But do you really believe that the executives in car insurance companies will somehow get smaller paychecks because of fraud? No! It's us, the ordinary customer's who'll pay for the fraud. Just like any other business, car insurance companies distribute their costs and losses between the customers by simply raising the rates to cover the loss. So in the end, a person who commits fraud is stealing from numerous customers just like him rather than the insurance provider.

But it really gets worse. You might assume that car insurance companies do nothing about fraud and you would be wrong. What respectful and large company would allow someone stealing from them even if it's a tiny piece of their revenue that will never affect the big picture? Car insurance providers are no fools that's why most large companies have internal departments that deal with investigation on fraud. These people are on a good salary and are interested in doing their job well. That's why all suspicious claims are processed through such departments and if these guys catch you there's big trouble ahead. Not only you will face a substantial fine and get your policy canceled, there will be more. First of all, you'll instantly get higher car insurance quotes from all other companies because you were caught on fraud. And of course, the case will be transferred to the police and you can expect court action due to financial crimes. Does a small fraud stand up for several years in jail? You'll have a lot of time to think about it if you're found guilty...

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