If you work in the insurance industry then you have probably heard of (or even experienced) an insurance scam at one point or another. Unfortunately, fraudsters often try to take advantage of insurance providers as they feel that it doesn’t technically harm anyone, however the fact of the matter is that fraudulent claims increase premium prices for everybody. As an insurance specialist it is therefore important that you know of current insurance scams to watch out for, and here Victor Millwell describes a few:
Fraudulent Whiplash Claims
Fraudulent whiplash claims is one of the oldest and most commonly used ways for individuals to make money out of insurance companies. The issue with whiplash is that it is very difficult to determine whether someone is telling the truth or not as there are very few tests that can prove if you are actually in pain and/or have suffered an injury. This is why a number of insurance providers have called for there to be tougher criteria for whiplash claims, such as having to provide medical notes and proof of loss of earnings due to missing work for medical appointments or pain. However, some are worried that this will mean that those who actually do suffer from whiplash after an accident will no longer be able to claim the compensation they deserve.
Smash for Cash Schemes
This is possibly one of the most dangerous insurance scams out there at the moment, as smash for cash schemes actually put peoples’ lives at risk. Smash for cash schemes do exactly what they say on the tin: a fraudster will purposely cause a crash and then claim it was the other driver’s fault in order to be rewarded with compensation. Currently, most insurance providers say that as a rule if you drive into the back of another vehicle then you are technically at fault as you weren’t giving the person in front enough room. This has led to fraudsters pulling in front of vehicles such as motorhomes and then slamming on their brakes in order to crash. In order to protect themselves against this sort of scam more and more motorhome owners are investing in dash-cams which can provide video footage in the event of an accident.
Fake Reports of Theft
In general, motorhomes cost a considerable amount of money, which is why if they are stolen owners can expect a hefty pay out to go towards replacing them. However, some people try and use their insurance in order to make some money on the side by claiming that their motorhome has been stolen when in reality they are storing it somewhere secret. In order to discourage customers from taking part in this sort of scam most motorhome insurance providers will require their customers to file a police report if their vehicle has been stolen. More often than not the prospect of lying to the police puts people off from making a fraudulent claim!
Lying on Quotation Forms
At the end of the day no-one really enjoys paying for insurance, however it’s something that we all have to do. The problem is that some people try to pay less by lying on their quotation forms which is technically fraud. Insurance providers regularly check the details provided by their potential customers to make sure that they are in fact true, however this doesn’t stop some from trying to get away with it. Generally, once an insurance company finds out that a customer has lied they will cancel their policy straight away (and charge a cancellation fee), however they can also launch legal proceedings if they choose to. Furthermore, other insurance companies will see that the customer has previously had an insurance policy cancelled on them, meaning that they will either charge them higher premiums or refuse to insure them at all.
Insurance providers are often thought of as big, faceless corporations that will not notice if customers try to bend the rules, however this isn’t the case. In order to keep your customers safe it is essential that you are vigilant when it comes to any type of scam or fraud and alert the police if you find any of your customers willingly breaking the law.
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