All of the cases of auto insurance frauds in the United States are causing most of the vehicle insurance companies to lose billions of dollars each year. The losses that these vehicle insurance companies have incurred are then passed on to consumers in the form of higher rates and premiums. According to the latest estimates, an average car insurance policy holder pays an additional hundred dollars each year due to frauds committed by other people.
Not only does auto insurance fraud end up costing everyone more money, it can also land you in jail. The penalties for those who are caught committing auto insurance fraud are severe. You will likely face a fraud lawsuit, a criminal conviction and several years in prison. You could also face serious fines, as well as paying back everything you stole from the insurance company.
Every state considers car insurance fraud a criminal activity and they have their own guidelines as to how the offender would be punished. This simply means that the number of years that a convicted offender would be serving behind bars varies one state to another. But despite of the differences in the manner of punishing these offenders, there is one thing that a convicted suspect would surely receive as a result of what he or she has done and this is spending a prescribed term in prison.
If you are caught committing vehicle insurance fraud every incident will go on your permanent criminal record as fraud and possibly as theft. This means future background checks will always come back with your criminal record showing. This could keep you from securing a job, a house and car insurance.
Most states also assess stiff fines, as high as tens of thousands of dollars, plus restitution money for each auto insurance fraud crime you commit. Each state is different, but every state has similar harsh financial penalties.
There are two types of auto insurance fraud: Hard and soft. Soft fraud can be easy to commit, even accidentally. You can avoid soft fraud by reporting all injuries and damages as accurately as possible. Always be completely honest and unbiased when reporting an incident to your insurance company.
Penalties for hard auto insurance fraud are even more severe. In these instances someone has to set out to intentionally defraud the insurance companies, seeking to secure payments without merit.
When it comes to auto insurance fraud, remember, honesty is always the best policy. If you cheat the insurance company, everybody loses.
Mike McTigue is an Automotive Journalist and former Car Dealer with a unique insight into the auto financing industry, and special financing.
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McTigue, M. (2012, March 8). . Retrieved March 14, 2012, from http://ezinearticles.com/?What-Happens-When-You-Commit-Car-Insurance-Fraud?&id=6927115Chicago Style Citation:
McTigue, Mike "." EzineArticles.com. http://ezinearticles.com/?What-Happens-When-You-Commit-Car-Insurance-Fraud?&id=6927115
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