Understanding Corruption And Fraud In The Auto Insurance Industry
An unfortunate aspect of the auto insurance industry is that corruption and fraud have always been present. Anytime an individual has something insured there is a significant chance of fraud being committed because that person stands to get money from this fraud. An example of an auto insurance fraud is when two individuals stage an accident beforehand. This usually occurs when the book value of a person’s car is worth more than the actual car, as the person will attempt to get the money for the car through his or her insurance. In these cases, the two people will have an accident with one another and then collect the insurance money after.
Another thing that certain people will do is fake an injury following a legitimate car accident. This has been possible in the past because whiplash is almost impossible to diagnose, as it is entirely based on the patient’s testimony. In recent years, however, doctors have begun to take a more active role in these cases in order to keep auto insurance costs down to a minimum. When someone is injured in an accident, the auto insurance industry is forced to reimburse the person, which drives up the prices in that area for everyone.
There have even been cases of fraud where an accident does not even take place, but is reported anyway. As long as both people stick to the story, there is very little that an auto insurance company can do. In some cases, there are entire rings of people who will pretend to be witnesses to an accident as well. These rings represent a form of organized crime. They function as one of the major auto industry issues that the public and law enforcements officials should be very concerned about addressing.
The auto insurance industry is trying to crack down on this fraud as much as possible, as are law enforcement officials. This is being treated as a very serious crime because it affects so many people. This is not a victimless crime, as ordinary people will have to pay more on their insurance every year due to the greed and corruption of certain individuals. Auto insurance has been put in place to help people who have legitimately been in an accident by giving them the financial means to repair their vehicles and receive medical attention. Those who are taking advantage of the auto insurance industry are cheating these honest people out of low insurance rates and premiums, which is something that the auto insurance industry definitely does not need.