Auto insurance fraud can be committed by or against the policyholder. Committing auto insurance fraud can result in your claim being rejected, your policy being canceled, and even your prosecution. Here are the different types of auto insurance fraud you should be aware of as a Plano, TX resident.
1. Falsely reporting a stolen vehicle
This fraud involves the policyholder falsely reporting a claim of a stolen vehicle under comprehensive coverage to get a payout. A policyholder who sells, intentionally abandons, or destroys their car to make a false stolen vehicle claim will likely face severe penalties such as jail time.
2. Staged Accident
Staged accident fraud is a reasonably common auto insurance fraud, with drivers continuously devising ways to stage accidents and make payout claims. The fraud may involve the driver in front of you abruptly slamming their brake so that you unavoidably rear-end them. Other drivers go to the extent of planting witnesses who will provide false information testifying that you were at fault.
This fraud is where the policyholder overstates the value of their car, equipment, or property to get higher compensation from the auto insurer. At Paragon Independent Insurance Agency, we recommend you do a vehicle valuation before purchasing auto insurance to reduce the chances of committing this fraud.
This auto insurance fraud involves the policyholder stating that they reside in areas with cheaper rates or not including all the drivers under the policy. Additionally, the policyholder can opt not to provide all the pertinent information on their auto insurance policies to make the rates cheaper.
Purchasing auto insurance from a highly respected insurer is the first step to protecting yourself from falling victim to auto insurance fraud. Paragon Independent Insurance Agency boasts veteran insurance experts who provide Plano, TX residents unbeatable auto insurance assistance. Contact us today.