Car insurance fraud is a crime just like any other kind of fraud is a crime. Fraud is defined as a wrongful deception with the intention of a financial or personal gain. Therefore, every lie you tell to your insurer with the aim of benefit from the lie may be considered fraud. Here are some forms of criminal fraud that many people don't know about.
Lying About Primary Residence
Insurance companies use many factors to determine car insurance rates, and location is one of them. The insurance company will be interested in your primary residence so that it can know the car theft statistics you will be exposed to, the condition of the roads you will be driving on every day, and other location-specific issues that determine your risk of accident or car damage. Therefore, you are committing insurance fraud if you game the system by reporting a relatively safe area as your primary residence when you really live in a dangerous area.
Lying About Primary Driver
This is another lie people use to get low rates from auto insurers. It is particularly lucrative for those with dangerous driving histories. For example, if you have a bad driving history and your wife or brother has a clean driving history, you might collude with them to get them named as the primary driver of your car.
Lying About Driving History
Fraud always involves lying, and lying about your driving history is fraud even if it doesn't seem that way to you. That is because driving history is an indication of your future driving habits, at least as far as the insurance company is concerned. Therefore, when you present a clean driving history that is actually false, you are fraudulently denying the insurance company money in the form of insurance rates.
Making False Reports of Car Theft
This is one of the biggest forms of car insurance fraud because a typical car theft claim has a huge potential payout. This type of fraud can take various forms, but these three are some of the most common ones:
- Shipping a car overseas, especially to places where the model is in high demand, and then claiming it has been stolen
- Abandoning your car to "encourage" thieves to steal it so that you can make a theft claim
- Giving away your car, say to a relative, and then making a theft claim
Fraud is a serious criminal charge that attracts serious penalties for the convicted. You don't want to end up in such a position, so contact a criminal defense lawyer if you have been accused of fraud.