Insurance fraud: what is it? As per the National Association of Insurance Commissioners, it can happen when an agent, consumer, insurance company, or adjuster purposely misleads another party to obtain financial advantage. Your car insurance agency in Miami, FL, will tell you that the potential for auto insurance fraud appears to be increasing because of the rapid changes in technology.
Since insurance fraud occurs frequently, we, as consumers, need to understand the different kinds of fraud to watch out for.
Hard Fraud
Hard fraud is when an insurance policyholder intentionally breaks their car so that the car insurance company will pay out. A staged crash is a type of fraud, though it doesn’t happen often. A driver will plan to crash into another driver so that they get into an accident. A partner or planted witness will then tell the police that the victim was at fault.
One more? A planned theft of a car. A planned theft is when someone plans to steal someone else’s car. The stolen car’s owner will then have a partner in crime sell, destroy, or strip the car of its pieces and then file a claim with an insurance company like Company Name.
Soft Fraud
Soft fraud is now seen as a crime of opportunity and is far more prevalent. Usually, it occurs when a policyholder distorts the facts and provides false information to their car insurance agency in Miami, FL, on an application or during a claim to increase the payout or decrease the cost.
Common soft fraud schemes are not revealing all household drivers, inflating automobile mileage, lying about the insured vehicle’s garaging address, and fabricating infractions or accidents.
