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Auto insurance fraud is a crime, and so is attempting to bend the law in your favor. Lots of people have tried it and only a few succeeded. When someone tips you on a “surefire” way to save some money with car insurance, ask yourself if it’s legal or not. Consult with a lawyer if in doubt. Here are some common pieces of advice that may sound good, but are illegal and will land you in prison.
Such a trick might have worked back in the early 2000′s. People with low yearly mileage needs used to drive without insurance. They were staying under radar – never speeding nor breaking any traffic rules – and always kept a budget of a few hundred dollars for the fine, in case they got caught.
Now you should know that police officers shouldn’t pull you over if you don’t do anything out of the ordinary, and that’s what these people were counting on. And, given that the fine for first-time offenses is usually lower than a year’s Liability insurance, it might have paid up to drive without coverage.
Well, this doesn’t work anymore. By using the Automatic Number Plate Recognition (ANPR) system, which is linked to the DMV databases, officials are able to track and seize vehicles that run without insurance. It’s simply a matter of driving across a police vehicle equipped with an ANPR device or a still camera. Trust me, you will be caught.
Exaggerating your claim is known as a “soft insurance fraud”. People with a legitimate claim who try to exaggerate the extent of the damages in an attempt to get more money from the insurance company are also committing insurance fraud, which is a serious crime in the United States. Major insurance companies have dedicated departments that investigate each claim thoroughly.
Soft fraud isn’t likely to get you into prison because the insurance companies don’t usually press charges for this kind of an attempt. They will raise your premium in future or, at worst, drop you as a customer. However, should they sue you for attempted fraud, chances of a criminal conviction are high.
There are countless of Americans who have received settlements after a soft or hard insurance fraud and bragged about it on Facebook or their personal blogs. Some even uploaded videos of them totaling their cars and laughing at the insurers who just fell for it.
Guess what, insurance investigators and public officials monitor social media circles for evidence of laws being broken. If you have a public video on Youtube that explains how you defrauded a certain insurer, the police will find out about it sooner or later and yes, you will be caught.
Also known as “rate evasion”, this trick is also classified as insurance fraud. Lying about where you live just to get a better premium is quite common and you’d be amazed at the number of upstanding citizens who believe it’s not a big deal so they can just do it.
The savings can be huge if you live in expensive states where you pay upwards of $5-6,000 per year for full coverage. You may be tempted to register your car on some bogus credentials in a really cheap state and get your insurance policy at half the costs.
Most people who try this petty scam will either provide false residence information or may be helped by a “friendly stranger” who, in exchange for a commission, will claim that you live in his house. The problem is that the state’s DMV will sooner or later notice that there are a few hundred people living at the same address.
Simply put, don’t do it. You will be caught.
