Overstating your loss in a home burglary; claiming that extra paint job for your car following an accident; reporting an accident that never even happened? Although the first two cases are not as severe as the last, they are all examples of what can be considered insurance fraud.
Of course, those involved if discovered will be charged for criminal offences, but the impact of insurance fraud can be felt by everyone. When insurance companies process claims, it increases the general risk associated with that profile. For example, if a driver with your similar background makes a claim, the insurer may deem that you, as well, may also be riskier. One driver might not affect you, but imagine how many are involved if insurance fraud costs $3 billion each year.
In addition to creating insurance fraud, consumers must also be careful of fake insurance companies. There have been many cases of insurance scams where consumers are offered an inexplicably good deal on their policy, which turns out to be nothing but a scheme. After paying the premiums, victims receive a seemingly realistic policy card with their information. Should the need for a claim arise, consumers will discover that they are not covered at all.
Insurance fraud can happen in many ways with various degrees of severity. However, it is clear that we are all affected by it. As consumers, you can protect yourself by learning more about the insurers and using rate comparison sites to see what is a likely premium for your profile. If you ever suspect a case of fraud, you can call the Canadian Anti-fraud Centre at 1-888-495-8501. There are many factors we can’t control about the premiums we pay, so make sure you are informed and protected!
For more information on insurance fraud, check out these articles:
- We All Pay for Auto Insurance Fraud
- Beware of Ontario Auto Insurance Fraud
- Why Insurance Fraud Doesn’t Pay
- The Consequences of Lying to Your Insurance Company
- 7 Tips to Avoid Auto Insurance Scams