What constitutes car insurance fraud?

What constitutes car insurance fraud is anything from misleading information to straight lies. It's any dishonest dealings you have with your car insurance company.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State...

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Reviewed byJoel Ohman
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UPDATED: Jun 8, 2020

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Here's what you need to know...
  • Car insurance fraud in any form is against the law in the United States
  • Car insurance fraud can consist of several different things such as misleading information or straight lies
  • The consequences for car insurance fraud depend on the circumstances surrounding the situation

Car insurance fraud is any dishonest dealings you have with your car insurance company.

If you provide false or misleading information during the quote process, you will be issued a policy based on car insurance fraud.

What happens if you lie to insurance? If you omit important information or tell a lie in the process of making a claim against your insurance policy, this is also car insurance fraud.

There are serious consequences to committing fraud.

Read on to learn about auto insurance fraud and then to find the cheapest auto insurance rates, just enter your zip code above!

Different Types of Claims that Constitute Car Insurance Fraud

 

What are the different types of insurance frauds? Staged accidents are the most costly and most serious of car insurance fraud incidents.

Crooks often cause accidents that look like the other party is actually at fault to make false claims and make money off the insurance company of the other party.

Often dishonest professionals such as lawyers and doctors are involved.

False claims include making a claim for damage that was caused intentionally to making double claims or even claiming for damage or injury that never actually occurred.

Premium evasion is another type of insurance fraud.

Making fraudulent statements or omitting information in order to save money on your car insurance premiums is premium evasion.

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Consequences of Car Insurance Fraud

The consequences of car insurance fraud can be serious or relatively light.

The severity of the consequences depends on a variety of factors, such as the seriousness of the fraud, whether or not it was a simple misunderstanding, and if it was the first offense.

Organized fraud or staged accidents where an individual is putting people in danger and gaining significant amounts of money are typically punished with jail time and heavy fines for retribution.

  • If an individual has committed insurance fraud in the past, fines and other forms of punishment will be much higher than if he or she is a first-time offender
  • If the car insurance fraud was committed simply because the person was ignorant of certain laws or it was done unintentionally, the consequences may simply be a cancellation of the policy
  • If the fraud was of a serious nature, regardless of the person’s intentions, he or she will likely face fines in addition to the cancellation of the policy

Finding Car Insurance Following Car Insurance Fraud

Be prepared to pay higher rates for car insurance coverage following a charge of car insurance fraud.

One of the standard questions asked by insurers when you are looking for a car insurance quote is if you have had any gaps in coverage. If you have committed insurance fraud, you will have had your policy

If you have committed insurance fraud, you will have had your policy canceled, often retroactively which results in a gap in coverage.

For many insurers, this is seen as an increase in the risk factor you present.

As insurance is all about managing risk and transferring risk to a third party, when insurance companies, deem you to be high risk, you are faced with high insurance premiums.

There may even be companies who will refuse to offer you any coverage, leaving you with the high-risk insurers as your best bet.

If you are in the market for car insurance following car insurance fraud, start by getting a variety of quotes from as many companies as possible.

Put our online car insurance quote tool to work for you. Enter your zip to start finding the best car insurance now!

References:

  1. http://legaldictionary.net/insurance-fraud/
  2. https://www.esurance.com/info/car/5-examples-of-car-insurance-fraud
  3. https://en.wikipedia.org/wiki/Insurance_fraud#Automobile_insurance
  4. http://www.criminaldefenselawyer.com/crime-penalties/federal/Insurance-Fraud.htm
  5. https://www.thebalance.com/what-is-a-high-risk-driver-527253

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