What Constitutes As Auto Insurance Fraud?

Auto insurance fraud costs the insurance industry millions of dollars each year, which translates to higher insurance costs for consumers. Understanding auto insurance fraud can help you report activities of others that can impact your rates.

Definition

Auto insurance fraud is any attempt to obtain coverage or benefits through intentional omission or deception.

Accident Fraud

Accident fraud involves obtaining claims payments for staged accidents, the intentional destruction of a vehicle or accidents that never occurred.

Theft Fraud

A theft fraud occurs when a vehicle owner arranges for a third party to "steal" a car to receive payment under an auto insurance policy.

Non-Existent Vehicle Fraud

Another type of fraud involves fabricating a vehicle serial number and obtaining an insurance policy on a car that does not exist. The "owner" then claims the vehicle was stolen.

Application Fraud

Application fraud occurs when the applicant willfully omits or lies about information to procure a policy. The insurance company would not have accepted the application if it knew all the facts beforehand.

References

• Kiplinger: Auto Insurance Fraud on the Rise; Jim Ostroff
• National Insurance Crime Bureau