The majority of us are honest, hardworking folks who are raising strong families and contributing members of our community. Unfortunately, a few people try to take advantage of us, and we need to be aware of what to look out for. Fraud, which includes insurance scams, is the second costliest financial crime in the US.
Insurance fraud is one of the most common crimes in the United States. The FBI estimates that insurance fraud costs more than $50 billion per year (excluding health insurance), and the Coalition Against Insurance Fraud estimates that at least double that amount is stolen each year across all aspects of the insurance industry; and that’s a conservative figure, because much insurance fraud goes undetected.
Insurance fraud is sometimes misunderstood as a victimless or innocuous crime; yet, the costs of fraud are passed on to all consumers in the form of higher premiums.” Here are some of the most frequent types of insurance fraud, as well as how to avoid them.
The following are some of the most common con games:
Today’s scammers may use the proliferation of COVID-19 as a pretext to avoid involving the police. Do not fall for this ruse because it just allows the scammer to file fake insurance claims. Send the cops to the site. Even if the damage is minimal, get a police record with the officer’s name on it.
Forced Rear-ending — The scammer will typically slow down or stop in heavy traffic or swoop in front of the victim at an intersection or on-ramp, leading the car to crash into them from behind. In most places, the individual who rear-ends the other driver is held responsible, and here is when the fraud begins. The con artist will then claim exorbitant medical bills and odd property damage (loss of IPhone, damage to other personal property, etc.).
Insurance premiums that are bait-and-switch. Some insurance firms provide cheap introductory rates or one-time reductions that expire when your policy is renewed. Low coverage, high deductibles, and exclusions may be used to compensate for the company’s low premium.
Operation Leaky Pipes is a scam in which a professional public adjuster and a plumber work together to teach homeowners how to make false insurance claims for pre-existing or non-existent water damage. In an attempt to claim money for house remodeling, the homeowners made false claims. Allowing contractors to take advantage of you is not a good idea.
That innocuous knock on the door could actually be a phony contractor. It could be a fraud if a contractor approaches your home and claims to have materials left over from a prior job. Keep in mind that some contractors who only accept cash, demand full payment up front, or propose you borrow money from one of their lenders are most likely committing a home contractor scam.
Counterfeit Air Bags – Airbags save thousands of lives each year when they inflate during crashes. However, at least a small percentage of those deployed airbags will be replaced with counterfeits during the repair procedure, which can be fatal. Make sure you go to a reliable repair shop and get factory airbags.
Rip-Offs for Windshield Replacement – Don’t be fooled by a man in a van who approaches you and offers to fix your windshield. The con artist obtains your insurance details and makes a bogus claim on your behalf. Only go to reputable repair shops.
Phantom Victims – You may not be entirely aware of everyone and everything around you following an accident. The wounded individual will make a bogus claim by claiming there was another passenger in the vehicle. Count the number of people in the other car and snap photos of the other car, its passengers, and the overall area when gathering information after an accident, such as the other driver’s license number photos, and contact information.
We sincerely hope that none of these things happen to you. If you or your family are involved in an auto accident, however, we are here to assist you with your claim. So give us a call right now. We are affiliated with a number of industry-leading firms as an independent insurance agency. These collaborations enable us to provide better coverage at a lower cost to our customers.