Some people think that auto insurance fraud is a quick way to profit from an accident. By defrauding their insurance company about an accident or injury that never happened, criminals are costing insurance agencies billions of dollars each year in the United States. Because of this, new penalties and criminal charges are being enforced more strictly to counteract this criminal behavior.
What is Insurance Fraud?
Faking or exaggerating injuries from an accident, staging car theft, or planning a collision are all examples of car insurance fraud. Basically, any act that is meant to procure undeserved financial gain from an auto insurance company is classified as fraud. False insurance claims are a serious problem that costs insurance companies tens of billions of dollars every year. The following points will help you learn more about the issue that is auto insurance fraud.
What are the Different Types of Insurance Fraud?
There are two major types of auto insurance fraud that are on the rise in the U.S. right now; soft insurance fraud and hard fraud. Soft insurance fraud is minor insurance offenses, things that take advantage of a person or situation or the insurance company. This can include over exaggerating damage or injury. The most common type of soft-fraud that occurs is when someone exaggerates or makes up an injury as a result of an accident, a difficult type of fraud to catch because some types of medical problems and their causes are hard to diagnose.
Another type of insurance fraud that occurs is hard insurance fraud. In a hard insurance fraud case a person might stage a car theft collaborate with someone else to plan an accidental collision in order to set up a situation where insurance companies get involved to pay for the damages.
Different states have different laws with regards to insurance fraud and so penalties and criminal convictions vary depending on where you live. Depending on the severity of the fraud, you can be charged with a criminal misdemeanor or a felony for committing any type of insurance fraud.
The vast majority of auto insurance fraud convictions are criminal misdemeanors which result from soft fraud being committed. Soft fraud is exaggeration and is sometimes committed without malicious intent. It is classified as fraud and as a misdemeanor nonetheless because it involves lying to an insurance company about the state or nature of the injury or accident in order to receive a bigger payout.
A misdemeanor conviction for this type of car insurance fraud can result in a fine, probation or even a jail term in extreme cases, although this will never be for more than 5 years. The fine will vary, depending on the seriousness of the offense, but with a misdemeanor it won't go above $15,000.
In recent years insurance companies have increased efforts to prosecute false insurance claims. Many companies now have special teams of insurance fraud investigators with backgrounds in law enforcement that can investigate and resolve fraud issues much faster than before. This process has lead to a significant decrease of payouts from fraud claims.
What is Insurance Fraud?
Faking or exaggerating injuries from an accident, staging car theft, or planning a collision are all examples of car insurance fraud. Basically, any act that is meant to procure undeserved financial gain from an auto insurance company is classified as fraud. False insurance claims are a serious problem that costs insurance companies tens of billions of dollars every year. The following points will help you learn more about the issue that is auto insurance fraud.
What are the Different Types of Insurance Fraud?
There are two major types of auto insurance fraud that are on the rise in the U.S. right now; soft insurance fraud and hard fraud. Soft insurance fraud is minor insurance offenses, things that take advantage of a person or situation or the insurance company. This can include over exaggerating damage or injury. The most common type of soft-fraud that occurs is when someone exaggerates or makes up an injury as a result of an accident, a difficult type of fraud to catch because some types of medical problems and their causes are hard to diagnose.
Another type of insurance fraud that occurs is hard insurance fraud. In a hard insurance fraud case a person might stage a car theft collaborate with someone else to plan an accidental collision in order to set up a situation where insurance companies get involved to pay for the damages.
Different states have different laws with regards to insurance fraud and so penalties and criminal convictions vary depending on where you live. Depending on the severity of the fraud, you can be charged with a criminal misdemeanor or a felony for committing any type of insurance fraud.
The vast majority of auto insurance fraud convictions are criminal misdemeanors which result from soft fraud being committed. Soft fraud is exaggeration and is sometimes committed without malicious intent. It is classified as fraud and as a misdemeanor nonetheless because it involves lying to an insurance company about the state or nature of the injury or accident in order to receive a bigger payout.
A misdemeanor conviction for this type of car insurance fraud can result in a fine, probation or even a jail term in extreme cases, although this will never be for more than 5 years. The fine will vary, depending on the seriousness of the offense, but with a misdemeanor it won't go above $15,000.
In recent years insurance companies have increased efforts to prosecute false insurance claims. Many companies now have special teams of insurance fraud investigators with backgrounds in law enforcement that can investigate and resolve fraud issues much faster than before. This process has lead to a significant decrease of payouts from fraud claims.
About the Author:
About the Author - Leigh Jackson has been writing for the Texas auto insurance and business industry since 2010. Jackson specializes in tips and strategies for online auto insurance and getting affordable auto insurance rates.
PLEASE HELP US SHARE THIS ARTICLE
About the Author
0Awesome Comments!