Post Update August 4, 2012 – PA Auto Insurance fraud is nothing new. People have tried to defraud PA Auto insurance companies and collect on PA insurance policies when they haven’t actually had a loss. In addition or have had a smaller loss than they’re claiming, since the beginning of the insurance business. In fact, insurance fraud has been ranked as the second most expensive white-collar crime committed in the United States every year. There are many types of PA insurance fraud, and it happens in all areas of insurance, from life insurance, health care insurance, property insurance and PA Auto Insurance Fraud. The severity of PA auto insurance fraud attempts, range from the simple amplification of a legitimate claim, filing a false theft claim or deliberately causing accidents and injuries.
PA Auto Insurance Fraud
PA Auto Insurance fraud adversely impacts the insurer and the insured. Insurers lose hundreds of millions of dollars every year as a result of insurance fraud. They account for a significant amount claims received annually. Honest people carrying insurance are affected because fraud either indirectly or directly leads to increased annual insurance costs. You could say that the cost of PA Auto Insurance fraud is built into every policy holders’ premium. As a result of this fraud, carriers raise rates every year to compensate for these illegitimate losses.
Home owners Insurance is one type of insurance coverage that has been significantly affected by insurance fraud. Dishonest home owners have staged fires and even paid burglars to commit a ‘fake’ robbery in their insured homes or apartments. Dishonest auto insurance policy holders have staged accidents or abandoned an unwanted car somewhere and then reported it stolen.
The rising number of insurance fraud cases in the United States has resulted in legislative attempts to address the phenomenon. These efforts include the passing of the Health Insurance Portability and Accountability Acts (HIPAA) and the formation of the National Insurance Crime Bureau (NICB), which gathers information on fraudulent activities using hotlines and other sources and refers appropriate cases for investigation and prosecution. In the United States today, insurance fraud is considered a ‘white collar crime,’ and as a felony which can carry a sentence of two to fifteen years in prison. In States that do not recognize insurance fraud as a felony it is classified as bribery, theft of forgery. These crimes carry sentences that can include imprisonment and/or financial penalties. Other sentences for insurance fraud may include probation, parole, restitution and community service.
Over the last 20 years I have witnessed a type of insurance fraud which in most cases goes undetected. Although most don’t realize this, allowing an undisclosed youthful driver in your household to drive your cars is insurance fraud. If you were to properly identify that driver to your agent, your auto insurance company would collect more premium to account for the inexperience operator driving your car. Unfortunately; many parents of new youthful operators learn this lesson the hard way. Depending on how long the driver has gone uninsured; an auto insurance carriers may deny the claim and cancel your policy. If you are currently in this situation and you don”t want to tell your current agent of carrier – you still need to come clean. Give us a call at 800-807-0763. We will provide you a quote with your children listed and confident you will be happy with the rate.
Michael E. Dortch
President & Managing Agent
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania 19446
(800) 807-0762 ext. 602