How to spot car insurance scams

Auto insurance scams cost the insurance industry tens of billions of dollars annually and usually take the form of insurance fraud. Insurance fraud occurs when individuals and/or drivers create automobile related circumstances that aren't genuine, inaccurate or pre-conceived for financial motives. In doing so the insured attempts to manipulate the legal system and insurance policy for fraudulent personal gain.

There are several instances when insurance scams can favor the scammer and are more likely to happen. These situations require certain situations for the scammer to pull it of well. The following list includes some of those requirements:

• An ability to not-verify actual circumstances i.e. accident with no witnesses
• The opportunity to engage in accident 'accidentally'
• Collision points that can incur the most fabricated damage
• Medical records that don't match the insured's injuries or seem overly high.
• Use of collaborators whether they be 'victims', repair facilities or medical assessment
• An innocent victim not involved in the scam.

Motives for insurance fraud

Insurance fraud may take place for a number of reasons loosely linked to an un-ethical and illegal individual will or desire. In some cases a conviction that insurance fraud is somehow the right thing to do may delude the insurance scammer into thinking what they are doing is getting back what they are owed.

For example, insured individual X may think he or she could have repaired his or her car with all the years of dutiful insurance payments made to the insurance company. So in an attempt to reclaim money paid out or simply avoid paying for the repair, individual X conjures up an accident to get fixed via insurance. This is a case of insurance fraud in which the motive is simply not in accordance with existing insurance laws and the criminal act is a staged accident and insurance claim under false pretenses.

Insurance fraud watchdogs and information awareness groups

Insurance fraud is not limited to individuals looking for a new automobile fix. Scams can potentially include sophisticated organized crime groups, mechanics, and medical facilities. There are several organizations that actively take part in catching, stopping and building awareness of insurance scams. A few of those organizations are as follows.

• Coalition against Insurance Fraud
• National Insurance Crime Bureau
• International Association of Insurance Fraud Agencies, Inc.
• National Associations of Insurance Commissioners
• Investigative Services Firms across the nation.

Tips on preventing insurance fraud

Anyone can be a potential unknowing participant in an insurance scam. For this reason it is important to be aware of the practice and stay aware of potential situations in which an insurance scam could take place. The following tips may assist drivers and/or potential victims in being prepared and avoiding insurance scams.

• If a pedestrian try and stay away from moving vehicles.
• If a driver, slow down near 'unaware' pedestrians.
• Keep an eye out for drivers who 'fall back' too close, accelerate and decelerate often.
• Install vehicle cams on the front and rear of the automobile
• Be aware of driving situations that can't be documented
• Take photos of any accidents and if possible obtain witnesses

Auto insurance fraud is illegal in all states except Virginia, which nevertheless investigates fraudulent insurance claims. In any case, auto insurance scams are generally not a good idea, may be prosecuted and can cause imprisonment and/or fine. It is probable insurance fraud will never be eliminated but it can be reduced.. This article has illustrated what insurance scams can involve, how to be more aware of the scams and ways to avoid being part of an auto insurance scam.

Sources:

1. http://www.iii.org/media/facts/statsbyissue/fraud/
2. http://www.knowautoinsurance.com/autoinsurance-articles/auto-insurance-fraud-penalty.htm

Tips on how to shop for auto insurance

Shopping for car insurance is a rather uniform process that is assisted by competition among auto insurers, and large amounts of information regarding auto insurance regulations, requirements, features etc. When shopping for car insurance your safety, financial security, and the protection of others on the road are primary concerns.

To shop for car insurance it's good to know about these things in addition to your vehicle, driving history, coverage types and insurers because car insurance is based on all these things. Doing this can be done in a step by step manner for the purpose of understanding what rates you qualify for, if you're being overcharged, and if you have enough car insurance.

• Consult state department of insurance

A good place to start looking for car insurance is at your state department of insurance. These are state run agencies that inform insurers, businesses and consumers about important insurance laws, registrations, processes and notices. For consumers, state departments of insurance provide a number of useful data such as comprehensive lists of car insurers for the state. The California Department of Insurance is even required by law to provide a price comparison of auto insurance.

• Research insurers

After getting an idea of what companies are available and which one's are cheapest, you then having something to negotiate with if you are given a higher quote. Keep in mind not all states require insurance insurer costs to be public so getting quotes from insurers in these states may require a few phone calls, or more personal information. Also, some insurers also charge surcharge fees in addition to insurance costs. These fees are related to providing a physical agent with which you can consult.

• Obtain vehicle data

Another useful resource when shopping for car insurance is the Insurance Institute for Highway Safety (IIHS). This non-profit organization collects data pertaining to vehicle safety, laws and regulations, and consumer brochures which can help you become aware of how your car ranks and what features insurers will look at. In some cases, installed car equipment such as alarms and other anti-theft devices that is installed in the vehicle may lower the overall cost of insurance over time.

• Create risk profile

Several historical factors are unavoidable when shopping for car insurance, however, knowing what these are and how they factor into your auto insurance cost can help you get a fair price, negotiate a price if necessary and take steps to lower future insurance costs. These attributes can also help you determine your risk profile which is used by auto insurers. For example, auto insurers may assess risk based insurance premium using payment history. By paying your bills on time and creating a payment history with the insurer, the price may come down over time.

• Assess insurers

In addition to all the steps that can be taken to lower the cost of insurance i.e. driving courses, deductible amount, car type, good student programs, safety equipment, driving record etc. the car insurers themselves might be best reviewed. In other words, just because an auto insurer has a low premium doesn't mean their claims support and claims adjustment process is actually fair and reasonable. This would be similar to having a low front end cost and a high back end cost if you actually get into an accident and need the insurance. Checking out consumer reports on company reliability, reimbursement formulas, service performance, rates, financial solvency and history is a good way to determine if any one particular car insurer is the right one for you.

Sources:

1. http://bit.ly/aRaVsI (California Department of Insurance)
2. http://bit.ly/cM0Pe1 (Free Insurance Quotes)
3. http://www.iihs.org/ (Insurance Institute for Highway Safety)

How to Assess if Your Car Insurance Provides Adequate Coverage

The legal minimum insurance coverage requirements in the United States are determined on a State by State according to the Insurance Information Institute. For example, in some states, damages may be paid regardless of who is at fault in an auto accident; these are no-fault states. Assessing if your auto insurance provides adequate coverage is consequently assisted by knowing your state's insurance laws. Some additional items to consider when evaluating how much car insurance coverage is adequate are listed below.

• Vehicle value(s)
• Bodily injury self, passengers, other motorists
• Non-vehicle property liability
• Natural hazard liability

Minimum State auto insurance requirements

Your State's Department of Insurance is a valuable consumer resource for assessing legal auto insurance requirements and personal auto insurance decisions. Legal requirements are the minimum amount of insurance car drivers are required to have. In some States only limited liability auto insurance is required whereas in other States liability and personal injury auto insurance are required.

This U.S. auto insurance requirements map illustrates what insurance must be purchased for vehicles registered in the corresponding States. In addition to minimum auto insurance requirements, personal factors such as vehicle value, regional auto values, fault Vs no fault States, and anticipated medical costs, and budget can be included in determining whether or not your car insurance provides adequate coverage.

Probability, Personal Preference and Insurance coverage capability

Assessing the probability of such an event and balancing that with your personal auto insurance preferences and coverage capability is part of the function of assessing your car insurance coverage needs. For example, in your neighborhood, town or region vehicle values may average a dollar value different than in other areas. In such case, acquiring insurance for exorbitant liability amounts may be impractical or unnecessary. Statistical information pertaining to auto claims can be found to aid you with your car insurance coverage decision, the Insurance Information Institute being one such source of information.

Vehicle value(s) and Bodily Injury

Your vehicle may be a brand new luxury model or a used model that has attained a value lower than the insurance deductible for the cost of damage. Depending on the type of vehicle you drive, you may or may not want to have personal vehicle insurance coverage in excess of minimum liability requirements. Bodily injury involves your and other people's lives and not their property and is more valuable in the eyes of auto insurers. The out of pocket expenses for bodily injury can be massive, making bodily injury coverage a valid consideration.

To further illustrate bodily injury likelihood, according to the National Highway Safety Administration (NHTSA), over 16 thousand auto fatalities are estimated to have occurred in the first of half of 2009 alone. This does not include the million of accident involving some form of bodily injury that occur each year. Keeping this in mind, the probability of bodily injury is relatively high and thus may be a conscionable factor in your insurance coverage decision.

Real estate, public property and other liability

In some cases your vehicle may be damaged or destroyed from reasons other than collision such as natural hazard or vandalism. Your automobile may also be stolen or damage public or private property. In such cases a type of insurance coverage called comprehensive coverage may be purchased. This type of auto insurance coverage costs extra, but you may want to consider it more of a necessity if one or more of the following:

• Your vehicle model is among top 10 most stolen vehicles
• Vandalism and crime is high in your neighborhood and/or city
• Lightening strikes, earthquakes and tornados are common in your locale
• Road conditions near and around your residence are potentially destructive

Additionally, since not every auto owner and driver has the same kind of insurance, you may still be required to pay for damages inflicted on a person, persons or vehicle(s) not fully covered by insurance even if you are not at fault in an auto accident. This type of liability is covered by uninsured motorist vehicle and bodily injury insurance coverage. In some States uninsured motorist insurance is a requirement up to a certain dollar amount, however in other States this type of insurance is optional.

Summary

Researching your States insurance requirements, and assessing your own insurance needs through weighing probability with cost and preference and then consulting with an insurance agent can all help you assess if your car insurance provides adequate coverage. In the car insurance assessment some of the more important factors to consider are bodily injury, State laws, vehicle age and value and coverage amounts.

The more coverage and the lower the deductible for the coverage, the greater the insurance premium can be. As will all insurance, assessing adequate coverage is somewhat a personal decision beyond legal requirements, but this personal decision may be more informed after understanding the auto insurance variables discusses in this article.

What determines good auto insurance

Many folks have heard of 'a deal' somewhere in the world of auto insurance. While that may be true, acquiring a good deal on automobile insurance is just one of the factors one might consider when purchasing automobile insurance. Things like quality, coverage and company reputation are also important when making an auto insurance decision. These factors in addition to those described below can help one recognize a good insurance policy.

How to know quality insurance at affordable price

A quality auto insurance company will have a high rate of customer satisfaction. Customer satisfaction is more than courteous client services it also includes claims negotiation, knowledge of automobile values, solid damage assessments, expedient and helpful services in the event of an accident and so on. Knowing which companies provide these types of high quality service at an affordable price involves researching several auto insurance companies either online, through word of mouth or from consumer reports.

Knowing what good auto insurance coverage is

Good automobile coverage should help you feel confident and safe when driving. To do this the auto insurance may be able to provide a number of services including replacement one's car in the event of total loss, reimbursement of towing expenses, provision of free damage assessments, and strong claims negotiation with other insurance companies. Additionally, the driver and all the occupants may have medical costs associated with the automobile well insured.

Optimal auto insurance features

Optimal auto insurance may reasonably include sufficient medical coverage for driver and passengers in addition to total loss provision for a vehicle, adequate liability coverage in the event of driver fault, competitive pricing and cost incentives, trained and helpful staff. There may be times when an auto insurance provider cannot meet all expectations, however the more consistently they are able to, the better that insurance may be perceived by clients.

Less desirable auto insurance features

In contrast to optimal auto insurance, "bad" auto insurance is a relative term. However, for the auto insurance shopper, distinguishing good deals from bad deals may be a mater of identifying a few key aspects. For example, does the auto insurance include poor customer service, disproportionate coverage, high surcharges, a negative reputation among drivers via word of mouth, and weak corporate financial standing? If yes, then one might to consider 1 or 2 more auto insurance providers.