Smart Auto Insurance Blog

Auto insurance fraud is a serious problem and it ends up costing American drivers billions of dollars.  The more auto insurance fraud that is committed, the higher auto insurance rates must be to combat the fraud dollars lost.  The Coalition Against Insurance Fraud estimates that insurance fraud costs Americans around $80 billion per year.  This outrageous statistic worries insurers as they try to keep prices down for their customers.  Not only does it hurt American drivers, but it hurts the insurance company’s bottom line.

First Acceptance Insurance, a provider of quality auto insurance in the industry for over 100 years, is taking steps to limit the amount of fraud affecting their company.  They’ve outlined the necessary steps to take if fraud is suspected.  They offer phone numbers, and emails including information for the National Insurance Crime Bureau.  There’s an email for Special Investigations Unit which is dedicated to stopping fraud in its tracks.  Taking the time to report suspicious behavior is greatly appreciated by these fraud units.

Representatives are available to talk to individuals about potential fraud situations.  They are trained to recognize fraud early in hopes that dollars can be saved and the losses aren’t passed onto honest drivers following the rules.  During these tough times, perpetrators are feeling desperate and are turning to dishonest practices to make money.  Even small embellishments on insurance claims can add up to big costs that hurt the entire insurance industry.

Written by Sara Smart

Follow me on Twitter: http://twitter.com/#!/SaraSmart55

Auto insurance fraud continues to be a major problem across the nation and it’s affecting how much everyone pays for their car insurance quotes.  With proper monitoring, it’s possible to decrease the amount of fraud out there but it needs to be a group effort.  South Carolina Attorney General, Alan Wilson, stated that about $12 million was reported in South Carolina alone last year in auto insurance fraud.  This was found in a recently released report according to the article by Jessica M. Karmasek on the Legal Newsline website.  This astounding number needs to come down but it’s hard to determine exactly how to do this.

Falsified claims are the number one cause of auto insurance fraud and this is why most auto insurance companies have a claim review team in place.  Suspicious claims are sent to an expert department for review and if considered possible fraud the claim will be investigated.  Unfortunately, the downside to this process is that not all of the suspicious claims are truly fraud so innocent people end up getting the run around when submitting a claim.

With online auto insurance quotes a popular method for obtaining auto insurance, it’s no surprise fraud on the internet is happening.  Most companies, including First Acceptance Insurance and Progressive, offer quotes online for auto insurance policies.  Checks are in place to ensure the policy being set up is for the right person and the right vehicle.  Credit report information such as social security numbers, addresses and date of birth are used to confirm identity.  This is not a perfect science either and perpetrators can even alter credit reports if access is obtained to the credit reporting agencies.  Hopefully, over the next few years, monitoring will improve and the amount of fraud will decreased, ultimately lowering our auto insurance rates.

Written by Sara Smart

Follow me on Twitter: http://twitter.com/#!/SaraSmart55

Many states are still working under the no-fault auto insurance ruling and experts believe this is causing a crisis in the auto insurance industry.  The laws were originally put into place to stop ambulance chasing lawyers from submitting small-claims cases, and it helped car accident victims receive funds quickly instead of waiting for the determination as to who was at fault.

Unfortunately, these laws are backfiring since many believe its contributing to fraud, rising medical costs, large benefit payouts, and excessive lawsuits.  Auto insurance quotes in Florida are skyrocketing and many are blaming their no-fault laws according to “Why Does Everyone Hate No-Fault Car Insurance?” by Barbara Marquand on FoxBusiness.com.  Some insurance companies have actually limited their business in states with no-fault insurance laws since it ends up being so much more expensive for the insurer.  This ends up affecting competition and can drive up auto insurance rates.

Currently, 12 states and Puerto Rico have no-fault auto insurance laws including Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.  The laws allow policyholders to collect funds for car accidents from their own insurance company regardless of who was at fault.  The laws also prevent people from suing for pain and suffering unless their injuries are a certain extreme.  Florida is the nation’s staged-accident capital and this of course drives up Florida auto insurance quotes.  Many industry experts believe no-fault auto insurance needs to be eliminated altogether or the crisis will continues and rates will keep going up.

Bristol West Insurance has a link on their page to The Coalition Against Insurance Fraud website with some useful information for consumers discussing how prevalent auto insurance fraud really is.  One particular article discusses how even minor “fudging of details” can be considered fraud and ends up costing insurers and ultimately consumers a lot of money.

Auto insurance fraud is not only committed by hardened criminals or fraud rings.  Many normal and generally honest people commit fraud through leaving out or changing minor details.  Some people feel they are owed more because of all the premiums they have paid so they tell a little white lie to get a little extra money.  They feel it’s a small amount and won’t hurt anyone.  The truth is, with so many people thinking this way, the losses to the insurance companies can really add up and at this point the costs are passed on to the customers through higher auto insurance quotes.

Ask yourself if you may have fudged the details just a bit in your favor.  Here are some questions to determine if you may be guilty of insurance fraud.  Have you ever underestimated the amount of miles you drive to work?  Have you ever said you park your car in a garage when you do not?  Have you let an auto repair shop inflate your bill to recoup your deductible?  Have you ever inflated the value of items in your car or home when filing a claim?  These are just a few examples of minor fraud violations that add up and really do end up costing everyone more money.  When you know better, you do better so, ensure you are as accurate as possible with your insurance company.

According to the article “Florida Senate Panel Advances Auto Insurance Bills” by Brent Kallestad on Business Week’s website, two Florida bills aimed at cutting down the amount of fraud running rampant through Florida moved passed an important Senate panel.  The Senate Banking and Insurance Committee barely approved the bills after some debate between lawmakers.

Legislature is trying to get a handle of the amount of auto insurance fraud that is frustrating insurers enormously.  The bills move forward after being backed by the insurance industry which would give them more power to deny claims they deem suspicious for fraud.  A similar bill is moving through the Senate as well.  Florida auto insurance quotes are impacted by the amount of fraud going through the state, so hopefully as fraud decreases so will auto insurance quotes Florida.

The bills are guaranteed to pass.  Mark Cedarberg, an Orlando lawyer, cautions lawmakers about giving the insurance companies too much freedom.  He believes that if the bills pass it will make it harder on honest people, including honest doctors who need to be paid.  Once an auto insurance company decides to deny a claim it will be challenging to get it reversed.  Insurers, medical providers, and lawyers all agree that fraud is too prevalent, but they can’t agree on the best solution to fix the problem just yet.

Have you ever wondered how auto insurance companies recognize staged accidents and other fraudulent claims?  There are mechanisms in place with each insurer to limit fraud as much as possible and usually a whole department is dedicated to the efforts.  But there are some things you can watch out for to ensure you are not a victim of this crime.

The article “Staged Accidents And Scams: How to Spot Insurance Fraud” from The Car Connection website, says that stage accidents cost policyholders and insurance companies billions of dollars every year.  During the recession they’ve been increasingly popular according to the Insurance Information Institute (III).  Insurance fraud can take many forms from false claims, staged accidents, and huge fraud rings that stretch across the nation.

Some key warning signs that may indicate you are getting involved in insurance fraud include people who appear at the accident and insist you use certain lawyers and doctors, doctors who insist you file a personal injury claim even though you were not hurt, and when tow trucks appear without any calls being made.  Also, if after the accident you recognize other parties are inflating claims and misrepresenting facts you may be involved in someone participating in fraud.  It’s important to report any unusual activity to your insurer in hopes that they can get to the truth and not lose any more money on fraudulent claims.  It ends up costing everyone more money, not just the auto insurance company.

Auto insurance fraud is soon to become a felony in the state of New York.  Legislators are working on harsher penalties for those submitting false claims and other fraudulent activity according to the article “New York Senate Passes Bill Making Auto Insurance Fraud a Felony” found on the US Insurance Corner website.

The New York Senate is hoping that passing harsher penalties against perpetrators will not only encourage less fraud but will ultimately lower costs of auto insurance quotes for everyone in the state.  Fraud losses have to be made up somehow by insurers and unfortunately it ends up coming out of innocent, law-abiding customers.

Republican Senator James Seward sponsored the bill and on the Senate’s insurance committee as a chairman.  He believes the new legislation offers a strong deterrent to those considering fraud against their auto insurance company.  He also sees this bill improving highway safety and dropping auto insurance rates for everyone.  Depending on the history of the perpetrator and the circumstances around the fraudulent activity, a person could face a class B, C or D felony which translates to much harsher punishment.

The bill targets those who stage accidents since that is one of the more egregious acts, but this is not the most common type of fraud.  The State of New York Insurance Department says about 9 out of 10 fraud cases are related to no-fault injury claims.

Auto insurance fraud continues to be a problem across the nation.  For years, auto insurance companies have worked to eliminate fraudulent claims and fraud rings.  Unfortunately, it’s still prevalent and costing consumers a lot of money.  Every time fraud is committed our premiums increase and this is not fair to the customers following the rules.

First Acceptance Insurance is working hard to limit the amount of fraud affecting their bottom line.  According to their website, they suspect fraud costs insurance companies and their customer billions of dollars.  The Coalition Against Insurance Fraud says that approximately $80 billion a year is lost because of fraudulent activity.  This is staggering and extremely frustrating to know it’s happening everywhere, all of the time.

The good news is that most auto insurance companies, including First Acceptance, have fraud departments in place, working around the clock to fight fraud.  First Acceptance, for example, has a specific team and information on their website to report fraud.  They also list information for the National Insurance Crime Bureau, who they work with, to combat this ongoing problem.  If you suspect insurance fraud, contact your insurer with information.  It may end up saving the rest of us a lot of money.

According to the article “Broward County Cracks Down on Car Insurance Fraud” found on MiamiHerald.com, auto insurance fraud is through the roof in Florida where studies indicate 23% of drivers were uninsured in 2007.  Representatives from 17 auto insurance companies throughout Florida joined forces with the Broward County Sheriff’s Office during a crack down on drivers on the road with no auto insurance coverage.

The recent crackdown on insurance fraud in Florida was a one day initiative put together by the sheriff’s office alongside the National Insurance Crime Bureau which works hard to combat insurance fraud.  Auto insurance agents actually waited at the sheriff’s substation as deputies called in to confirm auto insurance information during traffic stops.  They handled 39 calls by 3pm.  Deputy Marty Chastain advises that similar crackdowns are planned for the future and warns they will be random.

Not only is insurance fraud inherently wrong, but it causes Florida auto insurance quotes to rise across the board.  The innocent end up paying for the perpetrators’ schemes.  Auto insurance quotes Florida will need to rise to make up for the losses caused by auto insurance fraud.  Let’s just hope it’s not substantial and the efforts to bring fraud down have an impact.

According to the article “Insurance Study Sees Widespread Fraud in NYC” by Erik Holm, New York City residents are much more likely to file false claims driving up the cost of auto insurance quotes in NYC.  This is based on some research conducted by the Insurance Research Council, a nonprofit group funded by insurance companies.

New York state’s “no fault” system was implemented in 1974 and it allows someone injured in a crash to file up to $50,000 worth of claims for medical expenses or even lost wages with their own insurance company regardless of who is at fault.  The purpose of this was to speed up processes by eliminated the argument over who whose fault the accident was.  Through this system, perpetrators have figured out how to bank on false claims and take home cash.

The state insurance department has been working for over a year to revise the no-fault insurance regulation.  The Insurance Fraud Bureau estimates no-fault fraud has increased dramatically from 2006 at 10,117 instances to 13,433 instances in 2009.  Auto insurance companies are hoping that the insurance department’s changes will make it easier to deny fraud claims, but it’s going to be a process that may take years to make a difference.