Insurance Fraud: What You Need To Know Part I

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that-hurt-494062-mAre you Really Insured?

There is always great concern after a car accident when one suddenly comes to the realization that the person at fault is not insured.  What if that uninsured person was you?  “But, no,” you say, “I am well covered.  I carry my insurance cards with me wherever I go.”

Unfortunately, more and more often, people are learning that buying insurance doesn’t always mean that you are properly insured.  There are several forms of insurance fraud that can leave a person paying unreasonably high premiums, be under insured, or be completely unprotected. 

Personal injury attorneys often have to go to court to battle insurance companies, but cases of insurance fraud are often the most damaging to the victims.  For this reason, it is essential to be extremely vigilant when changing auto insurance policies.  Be sure that you do your research.  You should look into:

  • Your current level of coverage.
  • Your current premium.
  • Your current deductible.· 
  • The reviews of the insurance company that you are dealing with.
  • The reviews of the agent that is securing the policy for you.

In addition, you should be aware of the types of fraud that exist.  There are four commonly seen varieties of insurance fraud.  All aim to rob you of your hard earned money.

·         The Non-Existent Insurance Company. Like a phantom, this company appears briefly and then is gone in a flash.  Fake policies are written for unsuspecting victims and the premiums are collected, but when a St. Petersburg accident occurs, voila! the disappearing act amazes.  These are generally widespread scams and will involve numerous victims.  The money lines the pockets of the scam artists and there is no one to go after because the company never really existed. Of course, with a little internet research, one can learn an awful lot about internet companies.  Don’t believe the website of the company alone.  Check out Better Business Bureau ratings and any available customer reviews.

·         Straightforward Theft. It might not be as blatant as holding a gun to your head, but premium theft is clearly stealing in its own right.  Much like in the above scenario, the insurance agent continues to accept premium payments from you, but fails to validate the policy.  The money goes in his or her pocket instead.  This can be more easily avoided today due to the option to sign-up for direct withdrawal payments.  This also helps track where the money goes, should a scam be discovered to protect against insurance fraud.

·         Misleading Agent. Those who are too nervous to steal money from you outright, might instead talk you into an insurance policy that doesn’t fit your needs in order to collect a larger commission check.  This can be avoided if you know what your coverage should be.

·         False Policy. The last example of insurance fraud involves representatives overcharging for policies and keeping the difference.  This often means that the victim receives too little coverage, but pays excessively for it. Again, it may be possible to avoid this if you know in advance what sort of coverage you need.

Recognizing the potential for insurance fraud is the first step to avoiding it when seeking auto insurance in Saint Petersburg.  Many of these tricks and deceits can be discovered with a little knowledge. Then, one knows to keep his or her eyes peeled for warning signs.  Be sure to ask around for advice when looking for a reputable insurance company.  Read reviews online, read the policy provided to you, and know what you need in order to be properly insured.  If you are the victim of a scam, speak to a personal injury attorney about your rights.