AAA Educates Motorists on Auto Insurance Fraud During Michigan’s Awareness Week

auto insurance fraud

Car insurance fraud is among the many insurance-related crimes consumers can become victims of, if they’re not careful. The impact of this common yet devastating crime can range from tremendous financial loss to cancellation of an insurance policy.

Auto insurance scams can also have a significant impact on the insurance industry as a whole since companies often have to assume the responsibility of losses and may have to increase premium costs as a result. To curb the effect of fraud, AAA is encouraging motorists to become aware of this crime during Michigan’s Auto Insurance Fraud Awareness Week.

Car Insurance Fraud Boosts Premium Costs for Drivers

Car insurance fraud seems to be an uncommon occurrence, but according to a AAA Michigan statewide poll, one in six residents knows someone who has committed insurance fraud. The reason for the high number of fraud cases could be the broad range of types under the car insurance fraud umbrella.

Insurance scammers have been known to do everything from damaging a vehicle or filing a false or stolen vehicle claim, to submitting bills to medical services that haven’t been provided. If caught, scammers can be slapped with a felony charge, four years in jail and up to $50,000 in fines.

But criminals are not the only ones who must pay for this crime. According to statistics released by AAA, insurance fraud costs the average Michigan family $100 to $200 in additional property/casualty premiums each year.

To help combat the problems associated with fraud in the state, Governor Rick Snyder proclaimed October 13 – 19, 2013 “Michigan Insurance Fraud Awareness Week.”

Though efforts to provide fraud awareness have been focused on Michigan residents, drivers around the country can benefit from learning more about fraud and how it can impact their policies.

How to Help Combat Auto Insurance Fraud

Since it’s not always easy to recognize auto insurance fraud when it occurs, exploring some tips that help you identify fraud can be beneficial.

Recognizing Insurance Fraud

    • Unsolicited sales attempts. Agents attempting to sell auto insurance via email or by phone may be trying to sell fraudulent policies to unsuspecting victims.
    • Ambulance chasers. If you find yourself in a car accident and a medical doctor or attorney approaches you in an unsolicited attempt to help you get more money from your insurance company, you’re likely being approached to take part in fraud.
    • Falsifying insurance applications. Any agent that asks you to falsify your application for any reason is asking you to commit auto insurance fraud.
    • Car crash assistance. This type of fraud occurs when someone asks you to help crash his or her car in exchange for insurance money.

Help Report Insurance Fraud

      • Maintain records. When in an accident, AAA encourages motorists to maintain accurate records, including what happened, when and where. Names, phone numbers, addresses and witnesses are also important. This will help when reporting fraud to authorities.
      • Keep agent details. If an agent has asked you to participate in fraud, be sure to keep copies of emails and write down phone numbers, names, office addresses and a description of the person in case this information is needed by authorities.

The more information you gather about your fraudulent experience, the more you will be able to assist authorities when filing your report. Any attempt to combat insurance fraud can go a long way in maintaining the integrity of the industry and keeping your insurance premiums affordable.

Photo: iMorpheus