Auto insurance fraud is a major issue for many Americans, whether they know it or not. Studies show that this type of crime can add hundreds of dollars to the average driver’s premiums every year, regardless of their own driving record. For this reason, more government agencies are trying to clamp down on instances of fraud, and working with insurers to identify criminals trying to commit it. Agents who can let their clients know about these efforts, and what they might be able to do on their side of things, could end up having more success keeping them happy even if rates rise.
An investigation from the San Diego Urban Auto Insurance Fraud Task Force recently led to the arrest of Coltin Barody of Lake Elsinor, California, for his part in a conspiracy to defraud a major auto insurer out of some $13,000, according to a report from the California Department of Insurance. Barody, 26, allegedly coached his 20-year-old nephew in how to submit a bogus auto insurance claim after the latter’s motorcycle was stolen; the bike only had liability insurance, meaning that he would not receive any money to cover the remainder of the loan the motorcycle carried.
What happened next?
Barody was allegedly trying to create a fraudulent timeline in which the nephew, Jacob Holloway, purchased more coverage for the bike, then lied about when it was stolen, the report said. However, text messages after the bike was stolen confirmed that they tried to fabricate the timeline.
“This case serves as a reminder that fraud is a costly crime for insurers and consumers,” said California insurance commissioner Dave Jones. “These crimes are an expensive drain on the state’s economy totaling billions annually. The cost of these scams is passed along to consumers through higher rates and premiums.”
Agents can take action
Because auto fraud continues to be a problem in so many parts of the country, it might be wise for insurance agents to make sure their clients fully understand the ways in which this type of crime can impact their bottom lines. The better people understand their coverage, and how costs are impacted by any number of conditions, the more satisfied they’re likely to be with their plans, and the better their relationships with insurers and agents alike. That, in turn, will probably engender better client retention rates for agents going forward.