Ever wonder why car insurance is so expensive? The sad truth is insuring your car would be a lot less if it weren’t for wide spread insurance fraud.
According to the Insurance Research Council, 21% to 34% of all the insurance claims made in the America in 1996 were suspected to involve insurance fraud. Current estimates place the cost of car insurance fraud at around $14 billion per year. Unfortunately, to remain profitable, insurance companies must pass these expenses on to the consumers, resulting in higher insurance premiums.
There are two categories of car insurance fraud: hard and soft. Soft fraud can include submitting injury claims unrelated to an accident, filing multiple claims for the same injury or claiming higher damage repair costs than were actually paid. Hard fraud can include staging a car accident, filing claims for medical treatments that were never received, inventing injuries or falsely reporting a stollen car.