Insurance scams are becoming more and more prevalent, thanks to fraudsters’ efforts to perfect their skills in order to take advantage of insurance consumers who want to protect their assets. Incidentally, cybercrime is increasing as well, which correlates with the rise in insurance fraud and scams.
Thankfully, if you know what to look out for and learn the tactics of the criminals, you can protect yourself and your insurance premiums as well. It’s also important to know what protections you can put in place in case you do become a hapless victim of an insurance scam, despite your best efforts to educate yourself and protect your assets.
Read on to learn more about insurance scams and determine if you are at risk and what you can do to reduce your risk:
Insurance fraud is a type of crime that victimizes insurance companies and insurance consumers at an ever-growing pace. In fact, the Coalition Against Insurance Fraud estimates that around $80 billion in fraudulent claim payments are made annually. Furthermore, the Federal Bureau of Investigation (FBI), found that insurance scams and fraud cost the average family between $400 and $700 annually in increased insurance premiums.
There are many types of insurance scams that have become increasingly common. The following are just a few short examples of what to look out for:
To avoid this particular scam, we recommend filing a police report directly after an accident to avoid he said/she said. We also recommend that the client call their insurance agent immediately, as well as take photos of each car in the accident, the licenses plate, insurance card, and driver's license of all parties involved if for some reason a police report isn’t made. You may even want to record a verbal statement on your phone of the other driver if they are admitting fault at the scene.
Thankfully, you aren’t helpless in these situations and can make yourself much harder to victimize by taking the following precautionary steps:
Many people fail to report a scam once they have become a victim simply because they are embarrassed, felt it was futile or didn’t know how or where to report it. However, reporting establishes accurate statistics on the number of people affected, which in turn alters the way the FBI and other law enforcement agencies devote resources to breaking up fraud rings. In most cases, it’s best to begin with the police (a must if you want to make an insurance claim on stolen property) and report compromised information to your bank and insurance provider or agent as soon as possible.
By taking the advice outlined above, you will be much less likely to become a victim of these increasingly common insurance scams.