When you pay your monthly car insurance premium, you may wonder why its so high, and whether you are being scammed. In fact, however, the culprits are usually the people with the insurance, and not the companies providing it. Want to know why? Here are some of the most common auto insurance ripoffs:
Sometimes people will use their insurance to get a new car when their old one is just about to give out. If the driver gets into an accident just as the engine hits 150,000 miles, for example, you have to wonder.
Other dishonest drivers stage a low speed accident, and then claim thousands in medical bills, sometimes going so far as to claim permanent disability.
Taking this a step further, the scammer may even bring a few friends along for the accident, and then claim that these passengers also suffered injuries. The friends settle for a goodly sum, and then give the primary culprit a percentage of their take.
What may seem like a relatively minor scam, but can actually run into serious money is the person who, wanting to make sure that parts are replaced and not just repaired, will intentionally cause additional damage after the accident.
Finally, it may not be the owner of the car but the repair shop who devises the scam. Some shops will drastically inflate the costs of repairs, reasoning that the money isn’t really coming out of anyone’s pocket.
Insurance companies that provide auto coverage have a few defenses against scams. One is the use of deductables. Since the insurance holder has to pay out of pocket the full amount of the deductable before the company has to pay anything, this theoretically reduces the incentive to use insurance. Second, making a claim against your insurance can result in a significant increase in premiums, and this increase can be applied for years. Again, this discourages frivolous and fraudulent use. Finally, fraud is a criminal offense, and offenders can be prosecuted. Those convicted may face jail time.
In the end, though, the people who are hurt most by fraud are the innocent people who do nothing wrong. They are the ones who have to make up for fraud losses in the form of higher premiums. Because every auto insurance quote has some amount factored in for fraud.
By: Aiden Matthew Wilson
Posts Tagged ‘Premiums’
Auto Insurance Ripoffs
January 23rd, 2010Commercial Auto Insurance – How’s It Different From Common Insurance Coverage
January 4th, 2010
Commercial auto insurance may not be as commonly availed as other types of insurance. But it’s sort of essential for the class it’s meant for – the small and medium sized business enterprises. Incidentally, that’s the chief difference between commercial insurance for automobiles and other common types of auto cover. This coverage specifically caters the companies having several vehicles.
In order to get more business, various companies engaged in selling commercial policies generally offer various kinds of discounts and reasonable premiums. This type of coverage generally comprises six different types of policies. Only some of the types, like third party insurance are mandatory as per law. Due care should be taken to include only those options on your policy that are relevant to your needs. Otherwise, you will end of up paying too much as premium, because all options have their separate premiums. Having understood the basic difference between auto insurance and other types of policies, it is not out of place to look at some other aspects of commercial policy.
Commercial Insurance – Understanding The Significance
Commercial insurance for vehicles is actually a measure to safeguard your company against possible losses owing to accidents involving vehicles belonging to your company. It is not too hard to imagine the catastrophic effect that accidents involving vehicles of your fleet might have on the financial affairs of your company.
Is It Available Online?
Like other types of indemnity, commercial auto insurance is also readily available online. In fact, you will find much better offers for insuring your fleet online than you would in case of companies having physical locations. Online companies offer handsome discounts as well as comparatively low premium amounts.
However, getting policy entails payment of more money compared to common types. Therefore, you must be doubly cautious to steer clear of fake companies operating through Internet. Even when you procure coverage from companies whose reputation is established, don’t ignore to read the terms & conditions in totality.
What Is It Composed Of?
There is no difference in the composition of a commercial policy and other types. In fact, all indemnity policies are divided into three parts: declaration, insuring agreement and terms & conditions. While it’s important to go through the complete document, specific emphasis must be laid on perusing the terms & conditions part. Careful scrutiny is especially important in case of commercial insurance, because it’s actually a combination of different policies. You should get exactly what you require and what you pay for.
By: Andrina James
Cheap Full Coverage Auto Insurance
December 6th, 2009
If you are in the market for cheap auto insurance, you are bound to be confused by the wide variety of choices available. It pays to take some time before you make a decision. It is therefore important that you consider several aspects before you take a definite decision. Once you are armed with the basics, you will be ready to go ahead and choose the perfect auto insurance plan for your needs. You can — and should — of course, seek some help. When you hear the phrase “full coverage auto insurance”, do you know what it means? This is simply a comprehensive coverage that would cover you, personally, in every aspect and possible type of insurance the company offers.
For example, coverage for medical costs may be optional with some insurance policies. But if you have a full coverage auto insurance policy, you can have your and your passengers’ medical costs covered, should you be in an accident where injuries are sustained.
A full coverage auto insurance policy also covers liability. This means if you are at fault during an accident, the coverage will enable your policy to compensate for the damages caused by you. It is always advisable to have liability coverage in your auto insurance. Although you may always claim that you had never been at fault, you can never be sure where the blame will ultimately be placed in an accident. It is always better to be on the safer side with auto insurance.
The premium to be paid and the policy period will differ based on the insurance company, your age and also your gender. The age of your vehicle also determines whether you should go for full coverage or not. Supposing yours is an old vehicle on its last legs, it is not necessarily a good decision on your part to go for full coverage, as you will end up paying a higher premium. You may end up paying more premiums than the current market value of your car. Newer cars, or any vehicle for that matter, are better served with cheap full coverage auto insurance policies. There are other comprehensive policies that can cover you in cases of vandalism or arson, as well, though they are not as commonly purchased by people.
You can always check out the various online resources available for more details on cheap full coverage auto insurance. Also, don’t be afraid to get in touch with insurance agents, as they can provide you great information on the current trends in cheap auto insurance.
By: Jennifer Bailey