COVID-19 has caused fear, uncertainty, and doubt in people. Many believe it will lead to the most significant recession we have ever seen. As with any large catastrophe, you have a handful of fraudsters looking to cash in and take advantage of a delicate time.Insurers are prepared for the increase in insurance fraud that often occurs during desperate times.Detecting insurance fraud requires a thorough knowledge about the scam, how it is committed, and how it is concealed.There are, in most cases, financial motives why a person may turn to fraud.
- Addictions ( drug, gambling, alcohol )
- Lavish lifestyles
In desperate times of need, people and businesses may find themselves in a financial situation where they see no way out other than committing insurance fraud. A building owner decides to burn down his building to collect the value from the insurance company. This will lead to criminal charges if found guilty, and the person will then have an even bigger pile of stress mounted on them.
What Is The Punishment For Insurance Fraud?
If you are deemed guilty by your insurance provider you can expect:
Denial of claim: The claim in question will be denied.
Cancellation: You could have your insurance policy canceled.
Increased rates: You will pay more for insurance in the future.
Trouble getting insurance: You could be denied future insurance coverage in the future.
Face Jail Time: Fraud over 5,000, up to 14 years in jail.
Auto Insurance Fraud Rings
Fraud rings know how to commit car insurance fraud. They know who to target, educated on insurance laws and regulations, and know-how to profit from insurance fraud claims. Fraud rings for the most part, involve a tight-knit group of people who work together to commit insurance scams and fraudulent activity. These actions can be complex and involve dozens of people.
Common participants include :
- Drivers and witnesses
- Tow truck drivers
- Mechanics and auto body shops
- Doctors and medical professionals
- Lawyers and paralegals
How To Report Car Insurance Fraud
If you have information or suspect an individual of insurance fraud, please call 1-877-IBC-TIPS.Learn more about Car Insurance Crime and Fraud at the IBC website.Insurance fraud only hurts the public as this is the #1 reason yearly rates go up.