We all pay the price of insurance fraud with our premium
Joe has the right-of-way and waves on a Sally who has stopped at a stop sign, and then when she proceeds into the intersection, he hits her. When the police arrive Joe denies waving Sally on, and she is ticketed for failure-to-yield. Her insurance company pays for all Joe’s damages and claims of injury and suffering.
Randy is calling around to get cheaper insurance rates, and discovers that it is going to
cost over $100 more a month to add Ken, his sixteen-year-old son, to his auto policy. The next place he calls he fails to reveal Ken is a driver and buys the policy.
Margaret lives in Philadelphia, but gives her insurance company her cousin’s address a couple hours away in a rural area, giving her a much lower rate.
Alice runs off the road because she is texting while driving and causes damage to the side of her car. She gets home and realizes she has a $500 deductible on both Collision and Comprehensive, so she calls the insurance company and reduces her deductibles to $50. A week later she calls the insurance claims office and reports a hit and run accident. Her collision pays for damages, and she only pays $50.
What do all these scenarios have in common?
They are all describing insurance fraud.
The estimated cost of fraud to the insurance companies is approximately $30 billion. Who do you think pays for that? You do. The honest person giving honest information to your insurance company. Just think of how much you could save if that $30 billion was divided up among every honest insured person in the US.
What should you do?
You can help by reporting any suspicious activity surrounding a claim. You can always make an anonymous call to the authorities and advise of the suspicious activity. Perhaps it is someone trying to
involve you in a fraud scheme, or someone trying to defraud your insurance company. Maybe you suspect your neighbor set fire to his house on purpose to collect insurance money because of financial stress.
If you are witness to an accident, take the time to provide your statement to the police and make a call in to the insurance companies involved, especially if it appears that someone is trying to fake injuries.
Continue to be honest, and encourage your friends and family to be honest with their insurance companies. Educate them on the cost to everyone for dishonesty.
If you are involved in an accident, no matter who you think is at fault, take a few deep breaths to calm yourself and take the time to take many pictures with your cell phone or camera if available. As soon as you get to your destination, take the time to write down every detail from the few moments before the accident up until you pulled away or were picked up to be towed. Do not leave out any details, you never know what might be important later.
Make sure you get complete information from the other driver. If the police are called, they will get that as well (and it is always recommended you call the police, no matter what the other driver says). Make sure you get the officer’s name and the report number.
Make sure you note everyone who was involved: Passengers in your car and the other car and any pedestrians or drivers who happen to be near and witness what happened.
Hopefully you will never be the target of a fraudulent claim, but if you take these precautions and take detailed notes of an accident, you can assist the insurance companies to resolve the claim prudently. If everyone made this a practice, it will save many people money.
