Insurance fraud on the rise


09While there have been some major improvements since the start of the recession two years ago, many people are still struggling to make ends meet. Many have lost their jobs, while others have been forced to take two jobs and take money from their retirement fund causing many people to be stressed out. A survey made by Hartford Financial Services Group, Inc reports that about three-fourths of Americans still worry about their employment showing signs of struggling.

As the recession continues to make everyone’s lives difficult, the auto insurance industry is reporting increased numbers of auto insurance fraud cases. More and more people are resorting to illegal means in order to cope up with the troubling economy. While auto insurance fraud is nothing new, the rise of the number of people committing these acts is attributed to the troubled economy brought about by the recent recession.

With the abuse of insurance claims posing a serious problem, and the increased number of arson, vehicle give-ups, and staged accidents, auto insurance companies have been forced to take action. Some drivers have even driven their cars off into lakes claiming their cars have been stolen, while others try to force others into an accident, all this in order to claim their insurance. These incidents have caused premiums to rise, and it’s not surprising if other prices or rates follow suit.

Many people do not realize that insurance fraud affects not only the auto insurance companies, but the consumers as well. Drivers with a bad credit rating history are being affected the most as Insurers have become increasingly hesitant to cover them since drivers with bad credit tend to commit fraud more often than drivers with a good credit rating. Sadly enough, even drivers with no history of fraud may face a higher premium. It may even be possible that they be denied coverage if they have a bad credit rating.

On a more enthusiastic note, drivers can still keep rates low provided that they review their insurance policies and keep an eye out for available discounts. Shopping online may help you find lower rates. You can find hundreds websites allowing you to compare auto insurance quotes from multiple companies in a matter of minutes. Be sure to speak with an agent and make sure you are properly covered.

The penalty for insurance fraud, if convicted includes massive fines as well as prison time. Criminal charges are not your only worry. Insurance companies could file civil lawsuits as well.