February 24, 2011

Ways Drivers Can Commit Auto Insurance Fraud Accidentally

When getting an auto insurance quote, there are elements that factor into the resulting price of coverage for each individual insurance policy. The cost of coverage given in an auto insurance quote is determined by the make and model of a vehicle and the driving patterns of the insured drivers on the policy. These factors fluctuate, but a blanket charge that is figured into all coverage plans is the shared burden that all carry to compensate for auto insurance fraud. Most do not really think about it, but there are ways that drivers can commit auto insurance fraud accidentally. It is important to know these ways so that steps can be taken to avoid such things.

Auto insurance fraud can be broken down into two different categories. There is the hard fraud, which comes when someone intentionally invents or creates scenarios so that payment of a claim will result. This could be by causing their car to catch on fire, intentionally wrecking, or even faking a theft. The other type is soft fraud, where opportunities are taken to better the position of the one making the claim without using complete truth. It is generally understood that when someone commits auto insurance fraud accidentally, they are involved with the soft or opportunistic fraud.

A common way that people get involved with auto insurance fraud is by misremembering events or unintentionally giving false information while opening a policy with a new insurance provider. For example, someone might forget that they have had a ticket or a claim within an extended period. Another example would be misreporting the distance that they drive to work. These are seemingly insignificant details that might result in a lowered price on an auto insurance quote. If a person has a collision during the life of a policy, they risk the insurance provider denying a claim based on the fact that their insurance policy was not valid and was based on false information. It is critical that all information given to the insurance provider be factual without exception.

Auto insurance fraud has also reportedly been committed accidentally by people recanting details that are exaggerated to protect their own interests. People might inadvertently leave out little details when they are making a claim to better their position. Rationalization of fault might cause the disclosure of certain information from being reported. Through the perspective of the insurance provider, all details should be reported and judgment be made by them as to who is at fault. By fully disclosing information that is accurate and factual, any suspicion of auto insurance fraud can be eliminated, whether by accident or intentional. This rule should apply both prior to claims and after any occurrence.