How Fraud Affects the Rate You Pay for Auto Insurance

Collecting over $1 trillion in insurance premiums annually, the insurance industry is a magnet for criminal activity. Whether criminals are filing a false injury claim after an auto accident or they inflated their claim by including old damage to their car, fraudulent car insurance claims are not a victimless crime; everyone pays more for auto insurance due to insurance fraud. Reporting individuals who commit fraud can help lower the costs of your car insurance.

Fraud Increases Your Insurance Premiums

The most significant result of insurance fraud is higher premiums for insurance costs. Like most businesses, insurance companies recoup costs by including those costs in the price you pay for their services. With many fraudulent insurance claims filed each year, even individuals who have never had an accident or filed a claim on their auto insurance may pay more for coverage because of fraud.

Fraud Requires More Specialized Employees

As the potential for fraudulent claims increases, so does the need to detect criminal activities. Insurance companies have to hire individuals with specialized skills and employ advanced technologies to stop criminals in their tracks. These costs directly affect how much you pay for the cost of protecting your car while traveling on the road.

Defrauding Insurance Companies Complicates the Claims Process

When you call to file a claim following a legitimate accident, you expect the process to be efficient. Unfortunately, with more and more individuals filing fraudulent claims, more questions are included in the claims process to help eliminate claims that may be fraudulent. Throughout the entire process, your insurance company is assessing whether your claim is authentic or not, which costs you time and may prevent you from getting your claimed paid as quickly as possible.

Insurance companies rely on policyholders like you to report instances of fraud. Utilizing your insurance company’s toll-free number to report fraud helps streamline the process of reporting fraud and protects your anonymity. By reporting each instance of fraud you come across, you are doing your part to help reduce the costs of car insurance for everyone.

Get a free quote today. Call us at 888-751-7511 for more information on Dallas auto insurance.