On top of rising grocery and gasoline prices, inflation has also caused a spike in home and auto insurance costs. Unfortunately, in addition to these market-related increases, a rising occurrence of fraud is sending insurance prices even higher. Whether you’re an actual victim of insurance fraud or simply an active policyholder, the reality is that insurance fraud impacts everyone. And as the frequency and complexity of fraudulent activities increase, so does the cost of insurance for all policyholders.
The experts at Mercury Insurance explain that insurance fraud is a deliberately deceptive act that often results in a wrongful insurance payout. It can be committed by applicants, policyholders, third parties or even the insurance providers themselves — and it affects virtually every type of insurance including auto and homeowners.
The main insurance-fraud offenses include fraudulent claims, application fraud and premium fraud. Of these, fraudulent claims occur most frequently, which involve offenders filing false or exaggerated claims to receive benefits they are not entitled to.
While consumers can help combat insurance fraud, they need to know what to look for. Mercury provides the following tips to be aware of:
- When looking at policies, verify the insurance company. Only buy from authorized companies and agents. Unauthorized insurance operations are illegal and policyholders are unprotected should the company go bankrupt. Know that if the price quoted sounds too good to be true, it probably is. Low premiums are great, but not if the insurer is unable to cover a claim.
- Fill out the application carefully. Never sign blank forms or blank applications. Incorrect, incomplete or false information on an application can jeopardize insurance coverage. It is a crime to supply false information on an insurance application or claim.
- Read the policy. Expect a copy of the policy from the insurer within a reasonable amount of time. Read it promptly to verify that it contains the proper coverage needed. If there is a discrepancy, contact the insurer immediately.
- Involved in an accident? Call the police. Always call the police and document unusual circumstances or activities. Gather as much information as possible at the scene of the accident.
- Maintain detailed records. This includes bills for collision repairs, home/property repairs and medical services. Keep copies of all insurance records, including copies of all premium payments.
- Be vigilant with billing. Watch for double billing or unexplained charges for any service received as part of an insurance claim. Avoid paying for premiums in cash and opt for checks or online payments.
