If you have been a victim of insurance fraud in the past, it does not mean that you cannot still get defrauded. That is why you must understand everything there is to know about insurance fraud, as well as how to fight back.
Anyone who has been a victim of insurance fraud should not just keep quiet; they need to fight back. And that is why this article today is about What insurance fraud is and how to fight back.
What is Insurance Fraud?
According to the FBI, the insurance fraud industry is worth $80 billion, with half of the fraud committed by insurance fraudsters centred on health insurance. This means that the problem of insurance fraud is a major one in terms of crime. According to the AVI, insurance fraud can cost policyholders between $400 and $700 per year, which is not a small sum of money.
That is why you need to understand what insurance fraud is and how you will be able to fight back. Insurance fraud is basically when an insurance fraudster gives non-existent insurance policies to customers so that they pay a premium for them. And at the end, when the customers file a claim, they discover that the insurance company is not forthcoming because they have been defrauded.
Insurance fraud can also come from customers who falsify situations so that they can file a claim and get money from an insurance company. This means that insurance fraud is oftentimes both the insurance companies and the customers. Insurance fraud is primarily committed by fraudsters rather than insurance companies.
How Insurance Fraud Works
The majority of insurance fraud cases are usually committed by the policyholder. Customers attempt to file exaggerated claims, commit title fraud and fabricate events in order to file claims. This is the most common type of fraud, but in some cases, the perpetrators may be individuals posing as insurance companies and selling non-existent insurance policies.
The main disadvantage of insurance fraud is that it either costs customers or causes insurance companies to raise their premiums, causing customers to pay more. It also causes many insurance claims to be denied by the insurance company multiple times. So insurance fraud is a major issue in the insurance industry, and you must learn how to protect yourself.
How to Spot Insurance Fraud
to uncover insurance fraud There are some telltale signs that you should be aware of if an insurance policy is a scam. They are specific ones that insurance fraudsters always take advantage of, and it is obvious that they are attempting to defraud you. Some of these indicators of insurance fraud are as follows:
- Bandit tow trucks
One of the most common ways insurance fraudsters defrauds people is when they are forced to sign papers by a bandit tow truck. If an accident has occurred and these bandit tow trucks appear, it might be the result of a staged accident or not, but what they usually do is force the victims to sign a paper so that they can tow the vehicle for repair and charge exorbitant prices.
Then they tow the person’s vehicle to any repair shop of their choice, perform shady repairs, and charge exorbitant fees for the accident while they wait to be paid. This is one of the most common ways insurance companies defraud people. Therefore, make sure you do not fall for this type of scam. Do not allow your day to be told by people you do not know that you can contact a towing service.
- Faulty airbag
After towing your vehicle to a mechanic shop, the mechanic might decide to install a faulty airbag on your vehicle, which will not protect you in the case of an accident. Therefore, make sure to check the airbag indicator on your dashboard to know if it has been changed. If it has been changed, then you are definitely getting scammed.
- Opportunistic home repair contractors
Another way people commit insurance fraud is when a natural disaster strikes and home repair contractors move into the affected areas to assist people with making changes and repairs to their homes. Many of them are legit; however, there are a few shady ones, and these are the ones that will want you to pay an initial fee before they start a repair. All you need to know is that the real ones require payment only after the repair is completed.
- Bereavement vultures
These are people that call you after the death of a loved one, claiming that the deceased owes them money on a life insurance policy and that you need to pay. So be cautious if you have recently lost a loved one and someone is calling and demanding money. What you need to do in this case is verify whether what they are saying is true or not before paying the money.
How to Report Insurance Fraud
If you suspect that you are about to be defrauded by insurance fraudsters, there are several options available to you. Anything that does not feel right is probably not right, so take a moment and go through these options to confirm whether or not you are getting scammed. Some of the things to do in order to report insurance fraud are listed below:
- What you want to do is to reach out to your state’s fraud bureau if it is available to report the case.
- Contact your insurance company to ask if they have a Fraud department that will be able to deal with the case.
- Visit this link and click on the report button to report any fraudulent case https://www.nicb.org/how-we-help/report-fraud.
- Finally, you can report to your local FBI branch in your area.
These are some of the ways you can use to spot insurance fraud so that you do not get scammed. Therefore, always make sure to confirm and check with your insurance company if you suspect a shady insurance deal or fraud.
CHECK THIS OUT: