October 17, 2017

Avoiding Car Insurance Fraud in the Rising Recession

Monday, June 15th, 2009 3:59 pm

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Avoiding Car Insurance Fraud

Avoiding Car Insurance Fraud

Many people that are struggling with their finances due to the current recession are turning to car insurance fraud to find some financial relief. People are ditching, burning, pushing their cars off cliffs, even sinking their cars and then reporting them as stolen to cash in on the insurance money.

According to the Associated Press there have been instances of vehicles found burning in the Nevada desert, cars that have been pushed into the Miami canal, and there was a BMW found buried in a field in Texas.

Other ways that people try to defraud insurance companies is by filing false accident reports, false “hit while parked” claims, and phantom accidents. One example of this is a man who took a hammer to his truck. He beat up the body of his truck and then said that he had wrecked his vehicle.

These practices seem to be on the rise as people are looking for an easy solution to their financial woes. People that are having a hard time repaying their car loans are some of the ones who are susceptible to taking this route. Some people view getting rid of the car and reporting it stolen as an easy way to eliminate a monthly car payment.

Some of the people involved in insurance fraud are people who normally do not involve themselves in criminal activity. But their conscious is eased by viewing insurance fraud as a victimless crime, since the insurance company is the one losing money; and the insurance companies have plenty of money to spare. What people fail to realize is that the money the insurance companies lose is passed on to consumers through higher insurance premiums. It is not only a crime against the insurance company, but also a crime against all who pay a higher premium due to fraudulent claims.

What people need to realize is that insurance fraud is not only a crime that affects everybody who has to have insurance, but is also a crime that can lead to stiff fines and jail time. The question that car owners considering car insurance fraud need to ask themselves is this one, is it really worth it? Is it worth the price of a heavy fine or the price of losing my freedom? Is it worth having a criminal record and the risk of paying higher insurance premiums or being unable to obtain car insurance later on?

The obvious answer to this question is obviously no, it is not worth the risk; insurance fraud is never the route to take. Instead, car owners who are struggling to make their car payments should try to work out a deal with their lenders before throwing in the towel. If a person can work out a deal with their lender it is a win-win situation for both parties; with car insurance fraud nobody wins.

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