Car Insurance Scams - Fake Claims and Corrupt Companies
Car Insurance scams are growing every day. A scam can take place from both the insurer and the insured. An insured creates a scam by voluntarily fabricating an accident to claim money from the insurance company whereas the insurer violates the business ethics and creates a scam when it does not pay the coverage amount as agreed upon. Regardless of who initiated the scam, it has an adverse effect on others. These effects are often far reaching ones.
Insurance Claim Fraud
Some of the scam techniques used by the insured are mentioned below:
Fake Hit and Run: This is a very common method adopted by people who then claim money from the insurance company. They lodge a fake hit and run case and falsely claim money from the insurer.
Paper Accident: In this scenario, a person voluntarily dent or damage his car in an attempt to make it appear as if it has been in a real accident. A claim is then issued to the car insurance company. This is called a paper accident. More often than not, a corrupt lawyer, doctor and insurance agent have a role to play in these scams. However, the claim made for the damage is usually kept below few hundred dollars or less in order to avoid an investigation into the claim by the insurance company.
T- Bone: This is a method by which a person knowingly crashes into another car as it passes by. A false witness is then produced for the purpose of the investigation. They tell the officer that the other car crashed into them while the car was halted at a red signal. They claim car insurance coverage for their own voluntary act.
Most scams are done by professionals who have practice drills before they actually commit the crime.
Fake Deals and Corrupt Insurance Companies
However, it is not only individuals who cheat the system, but sometimes the system that cheats its clients. How? Some of the known techniques are as follows:
There are many fake car insurance companies that may offer you very cheap insurance coverage for your car. However, after you have paid the premium, perhaps some two months down the line, you might receive a letter stating that the insurance company is going bust and that they will not pay for your coverage, should you make a claim.
There are many fake car insurance agents who entice you to buy insurance from them over phone. They may even carry fake identification with the logo of a company so as to make them look like real agents.
To avoid getting cheated by such fake companies and agents it is essential that you thoroughly research their validity and buy your automobile insurance from reputable companies.
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