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Auto insurance fraud has become a major focus of the industry in recent years as crooks get a little more crafty in terms of the ways they perpetrate this type of crime. However, it's important to keep in mind that not all types of fraud are going to involve major operations that rip off insurance companies for thousands of dollars; some are actually quite small and only serve to benefit one person. For these reasons, though, insurance agents may need to start doing a little more to help people understand what auto insurance fraud costs them over the course of a year, and what they can do to report cases they know about.

In one such incident, a Pennsylvania man has been charged with auto insurance fraud after he bought coverage following an accident, according to a report from the Columbus Dispatch. The man was allegedly in an accident in Altoona, Ohio, last August, and presented the other driver with information on a policy that had lapsed. The man then called his coverage provider and had that policy renewed, but was uncovered at the time the accident occurred.

What happened next?
Investigators discovered pretty quickly what happened in this case, and the driver with the falsified insurance, Michael Traveny, allegedly admitted to his insurer that he had been driving without auto coverage and tried to buy it later to cover the costs, the report said. In all, the damages for the other driver alone came to more than $3,900.

While it may not be extremely common, many drivers would likely be surprised to learn just how many people drive without coverage each year, often despite the fact that their states mandate having such plans in place. Moreover, they may not realize just how much money auto insurance fraud costs the industry every year, and how costs are passed on to consumers. That typically adds what could be hundreds of dollars to their premiums each year, and accounts for a healthy percentage of increases. For this reason, insurance agents who can explain the risks associated with such fraud, and what it causes for individuals as well as the industry, are likely to be those that have good ongoing relationships with their clients. That, in turn, will typically lead to higher customer satisfaction and retention rates going forward.

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