If you’ve been wondering why car insurance costs have been rising so much, one big reason has been the rise of car insurance fraud. If you want to get competitive insurance quotes from car insurance companies in Clifton Park, NY you will want to understand insurance fraud and how it affects premiums.
In short, insurance fraud is when a consumer, agent or insurance company deceives another for financial gain.
Car Insurance Fraud Types
Auto insurance companies often categorize fraud into two types: hard and soft fraud.
Hard fraud is when a policyholder destroys their property intentionally with the intention of collecting the insurance fraud money. Though it’s not common, this can take the form of planned or staged theft or accidents.
Soft fraud on the other hand is much more common and is often a crime of opportunity. It happens when the policyholder bends the truth and exaggerates the information in a car insurance claim to get a larger payout or a lower premium. Some common examples of this include not disclosing all household drivers, falsifying car mileage and misrepresenting accidents.
On the other hand, there are some fraud types that have nothing to do with the policy holder. This can be when dishonest repair shops and car repair scams overstate the accident damage to make additional money on unneeded repairs. This leaves them with a larger payout.
Then, there are schemes for insurance agents to themselves. This is often called premium diversion and happens when an agent or broker keeps a policy holders’ premium payment and doesn’t send it to the insurance company.
The last type of fraud is known as insurance company fraud. This is when unlicensed and illegal companies defraud customers by collecting premiums for fake policies, and unfortunately you don’t find out until you need to make a claim.
The Consequences of Insurance Fraud
When it comes to car insurance fraud, some bad people can make it worse for others. As more claims are made, car insurance prices often go up, so the insurance company can continue to make a profit. It is unfair, but it’s unfortunately how the system works.
Then, if you’re ever caught committing insurance fraud, the direct consequences result in fines, jail time and a loss of license, but this depends on the state the fraud was committed in. You may also wind up losing your existing insurance and not be able to get insurance again.
How Do You Avoid Getting Scammed?
It can feel like scams are everywhere nowadays, but thankfully, there are some things you can do to avoid the likelihood of getting scammed. The first thing you should keep in mind is that it’s best to be as honest as you can be with the insurance company during the quote phase and down the line if you ever need to claim.
Now keep the following in mind before signing anything:
Don’t Sign Documents Blind: Your signature is binding, so make sure you read all the information on the application carefully and clarify anything you don’t understand before signing.
Get Another Opinion: Trusting your intuition is important. If you so much as suspect fraud, it’s worth reaching out to another company for a second opinion, in general it’s a great idea to get three or four quotes, so you can make a good decision.
Report Fraud: Car insurance fraud should always be reported, this way it can be prevented in the future. So, if you feel like you’ve been the victim of fraud, let your car insurance company know, or let the authorities know if you’re comfortable to. This way, another person can be prevented from suffering the same way you have.
Know The Warning Signs: If you speak to an insurance agent and they are using intense sales pressure tactics, such as giving you a timeline, calling you incessantly, even showing up at your home, it’s a problem. On the other hand, if you can’t get a hold of someone at the company easily and if there is no office you can drop into, it’s a warning sign.
Choose The Right Company
One sure-fire way to prevent fraud is to work with a trusted independent insurance agency. One such trusted agency is NY Insurance Hub, a local staple, this is where New Yorkers go to talk to the insurance experts. If you want proven great prices and great coverage, NY Insurance Hub is a fantastic choice and they have plenty of reviews to prove that they are both legitimate and the choice of people all over the state of New York.
NY Insurance Hub Agency
125 Wolf Rd STE 404 Albany,
NY 12205 518-783-0105
GMB URL: https://g.page/r/CSpwJcUJX29hEBA
