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Car Repair and Insurance Fraud: What To Watch For

March 3, 2014

car getting fixed at mechanicsCar insurance fraud is a major cost to both insurance companies and to the people who pay for insurance. Among the methods by which insurance companies can be defrauded are inflated or false bills from car repair shops. After an accident, you want your car fixed quickly and expertly, by people you can trust. Part of that trust is knowing that your car is being repaired by an honest company that won’t overcharge your insurance; this type of fraud is part of the large overall problem that causes insurance rates to go up.

What is Car Repair Fraud?

Insurance fraud comes in many forms, and the owner of the policy isn’t always aware that the fraud is taking place. Such is often the case with car repair fraud, although in some cases multiple parties may be in on the scam. Car repair fraud most often involves a car repair shop billing the insurance company incorrectly.

This overbilling may be done by inflating the price of parts of labour, adding repair work that was not a part of the accident damages, or billing for work that was not actually completed or completed improperly.

The more an insurance company pays out in claims, the more they are likely to increase their rates. Car repair fraud adds up fast, and is a major problem facing insurance companies – and you as a driver paying for insurance.

Avoiding Car Repair Fraud

Car repair fraud may happen to you without your knowledge, but awareness can help to reduce the risk. Be on the lookout for signs that things are not on the level with your car repair shop, and you could save a lot of money and trouble.

Avoiding fraud starts the moment you have been in an accident. If your car needs to be towed, you should ensure that you have chosen a reputable towing company and that you know where they plan to take your car. It’s difficult to select a repair shop when you are still dealing with the immediate aftermath of a car accident. If your car is not drivable after the accident and must be towed somewhere, remember that you do not have to have repairs completed at the location where the car is towed. In some cases, your car may be towed to an impound lot before going to a repair shop, which allows you to take your time selecting a shop.

Avoid taking advice on the scene of the accident from the other driver involved. If the other driver suggests a repair shop for your car, it may be innocent – or it may be part of a fraud operation. It’s best to select a repair shop based on your own research.

It’s also wise to go over repair estimates and bills carefully, to ensure everything matches up and appears correct. Getting multiple estimates is a good way to ensure one shop isn’t overinflating their prices dramatically.

Choosing a Reputable Repair Shop

If you have never been in an accident odds are you don’t already have a relationship with a repair shop. While many drivers have a mechanic they trust, bodywork and paint are very different repairs.

Your insurance company is a good place to start for referrals; most companies have a list of reputable, trusted repair shops with which they maintain a relationship. The perks to selecting one of these shops include making the claim easier – billing will be handled easily and directly with the insurance company.

You are always free to choose a repair shop that is not listed by your insurance company, but you should be sure to check the company’s reputation first. There are a number of ways to get solid information about a car repair shop. Internet reviews from other customers, word of mouth from friends, and a check with any local agencies that rate such services can help you make a safe choice.

If You Suspect Fraud

If you have any suspicion of fraud from a car repair service, it’s best to report it to your insurance company immediately. Reporting fraud helps the authorities to crack down on companies who are breaking the law. It also helps to ensure that you and everyone else will pay fair insurance rates that are not being forced up by fraudulent claims.

Suspected fraud can also be reported to the insurance bureau of Canada anonymously. Take the time to read up on some fraud prevention tips so you can make sure you don’t ever become a victim.

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