Fraud, Crime Preventing Cheap Car Insurance

Insurance Crime on the Rise

A large issue for the insurance industry, law enforcement, and consumers alike is insurance-related crime, especially fraud and uninsured drivers. The cases of insurance crime has been on the rise each of the last six years now, and industry, officers, and the market have all struggled to cope with the effects.

A few of the related impacts:
– Higher costs to legal system, tax payers
– Time and energy exerted by officers, insurance sector
– Increased premiums for all car insurance policyholders

What are the reasons for the increase in crime? There are several educated guesses that experts provide. Economists point to poverty, unemployment, and underemployment. Police officers include the loss of staff and resources. Consumer advocates point to the high cost of car insurance (since not everyone can get cheap car insurance). Last but not least are “austerity measures” – which is code for cuts to social spending, jobs programs, public works, and government services.

How Insurance Crimes Work

As many as 20% of the drivers on the road these days have no insurance at all. Zero coverage. Nada. When you add in the percentage of underinsured drivers—those who do not have enough coverage to realistically meet their needs or their liability to other people on the road—the number could be as high as 50%, according to several state authorities.

State laws are designed to prevent people from driving without insurance. Drivers are required to have a certain level of coverage to get a registration, which puts a nice little sticker on the license plate. That lets officers know if you are registered or not. Drive without a registration and the brass will pull you over immediately.

However, many people get around this by taking out a 30-day policy, getting their registration, and canceling their coverage.

Insurance fraud problems are down to larger schemes whereby people buy or lease a vehicle, take out a big insurance policy on it, and then hide or ship the car out of the country. Next, they claim it was stolen, collect on the policy, and sell the car elsewhere. This is more common than ever. So much a problem, in fact, that the police and insurers have teamed up in Florida to offer rewards for information leading to arrests. And it's working pretty well!

Impact on Consumers

All of this makes it harder for you to find cheap car insurance. As insurers lose money, they charge the rest of their customers more to make up the costs.

More than ever, using quotes to comparison shop is essential to finding cheap car insurance.
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