States Doing More to Boost Awareness of Auto Insurance Fraud

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  • Across the country, auto insurance fraud remains a huge problem for policy providers and drivers alike, and as a result, many people end up having to pay far more than they probably should have to under normal circumstances for that kind of coverage. Now, more states are moving to crack down on this type of fraud in many ways, and part of that is educating consumers about this kind of issue with the hopes that they can help spot it and alert authorities. As this difficulty continues, however, it might also be wise for insurance agents to do a little bit more to help educate consumers as well, because the more that people understand these issues, the less likely it is to negatively impact them.

    On a national basis, auto insurance fraud probably costs the average driver between $200 and $300 per year, in part because there are many things that may constitute auto insurance, according to a report from the office of the New Jersey Department of Banking and Insurance Commissioner. In many states, something as simple as misrepresenting personal information, such as an address, is legally considered fraud if it results in a lower premium.

    “Auto insurance fraud is a crime that has a very real and serious impact on what New Jerseyans pay in annual premiums,” said New Jersey Department of Banking and Insurance Commissioner Ken Kobylowski. “When people commit auto insurance fraud it costs all New Jersey drivers.”

    Some warning signs
    There are other kinds of fraud that are more insidious as well, such as people feigning injuries after being involved in a legitimate accident, the report said. Others may intentionally get into accidents in such a way that it appears the other driver – who is actually the victim in such crimes – is at fault. Still more might even claim to have been in an accident in which they were not actually involved.

    Insurance agents who can do more to reach out to consumers about what constitutes insurance fraud, and what they can do to help stamp it out, will likely be able to count on having a strong ongoing relationship with them. Often, providing high-quality customer service is cited more than even the ability to find discounts in terms of what consumers generally want to see from their agents. Therefore, going the extra mile in this regard could lead to robust retention numbers year after year.