Auto Insurance Frauds - Common Insurance Scams That Cause Your Premium To Increase

In the United States, hundreds of insurance frauds are committed on a daily basis. These scams are becoming even more prevalent as the nation's economy continue to struggle. Unscrupulous individuals are currently devising schemes after schemes in an effort to come up with alternative methods of income or just to put extra money in their pockets.

Sadly, honest insured consumers like yourself and others have to pay a percentage of this debt resulting from these insurance frauds. Insurance companies refuse to shoulder all this financial burden created by insurance scams, all by themselves. As a result, each year we will continue to see an increase in our annual insurance premiums. Below are some of the most common insurance frauds.

1. Vehicle Theft

A.The Owner Give-Up: - It is a not an usual practice for corrupted vehicle owners to ditch, torch, abandon or even arrange to have his/her vehicle stolen and then claim that it was indeed stolen.

B. The 30-Day Special: - The vehicle owner report his/her vehicle stolen, while it is at a vehicle repair shop or merely at a hiding place for 30 days, or for the length of time it takes his/her insurance company to send a check as settlement for a stolen-vehicle claim.

C.Export Fraud:- The owner ships his vehicle overseas to be sold on the black market for a profit, and then report it stolen. The owner benefits from the profit made overseas and also from the proceeds received from the fraudulent insurance claim.

D. The Phantom Vehicle :- The perpetrator of this scam creates a phony title and registration for a vehicle that doesn't exist, and then purchase insurance on it. He then files a claim for a stolen vehicle.

E. Street-Racing Fraud: - There are Vehicle Racing losers who wreck their vehicles on wager their engine, custom wheels, sound system, etc., ditch the vehicle and then claim that it (and /or the parts) were stolen.

2.Body-Shop Rip-Offs

A small percentage of unfair body shops may also charge the customer or the customer's insurance company for shoddy workmanship or repairs that were never done. Among the most dangerous body-shop swindles are air-bag scams in which deployed airbags are replaced with incompatible bags or plain old junk-beer cans, rags, sneakers, and so on.

3. Dishonest Insurance Agents Scams

Some unscrupulous agents collect customers' premiums but never purchase a policy. What these agents sometimes do is to forge fake policies. The driver discovers that he is not covered only after he has an accident. Some commission-greedy agents may also discretely include additional coverage into a policy that were never authorized by the person buying the policy.

4.Premium Evasion

some individuals attempt to reduce their insurance rates by registering their vehicle in another state or county that offer lower premiums, under-reporting the miles they drive or failing to add a teen driver to their insurance policy.

Conclusion

The above auto insurance frauds may appear unrealistic, yet they do occur. These auto insurance crimes are easily orchestrated but difficult to solve. For more information on common auto insurance frauds you may visit http://www.thephiladelphiaautoservice.com/wordpress/?page_id=248