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What To Do If You Suspect Insurance Fraud

Although we all want to find ways to save money, fraud can lead to increased costs for everyone else. Insurance fraud can raise the premium for other policyholders by an estimated $300 per year. Activities such as lying on an insurance application or faking injuries continue to be a problem for all Maryland drivers. If you suspect someone is committing insurance fraud, it’s crucial that you make a report to help protect your own premium as well as everyone else’s.

If you suspect someone is committing insurance fraud, it’s crucial that you make a report to help protect your own premium.

Understanding the Types of Insurance Fraud

There are four main types of insurance fraud that could affect everyone’s insurance policies.

Application Fraud

Application fraud occurs when someone lies on their insurance application to get a lower premium or deductible. There are several factors that go into consideration when determining someone’s insurance policy. Things such as where they live, their previous driving record, and other drivers on the policy can impact monthly payments and coverage options. Lying on an application can affect the policies of others.

Prevention Fraud

Prevention fraud occurs when someone tries to get out of making payments at all costs. This could include any action taken to divert blame to other drivers or find ways to avoid responsibility. For example, a driver may have a passenger lie about the course of events to make it seem like someone else was at fault and thus financially responsible for the accident.

Reinsurance Fraud

Reinsurance fraud occurs when someone tries to ‘double dip’ and get extra insurance money after an accident. This often happens when a driver lies about a claim already submitted or approved and tries to secure money through a different means. Making multiple claims can drastically impact policyholders on both sides.

Settlement Fraud

Settlement fraud occurs when someone lies to try and get more money out of an accident than they should. This includes actions such as reporting false injuries, reporting existing conditions as part of the accident, or creating additional damage after an accident and trying to get coverage for it.

How to Prevent Insurance Fraud

Preventing insurance fraud could help you save money and reduce the chances of rising premiums. When you get into an accident, the best thing you can do is take meticulous notes and keep a record of all information. Taking photos of both vehicles and noting down the other driver’s information can be crucial in avoiding fraud.

How to Report Fraud

If you suspect insurance fraud, making a report could benefit policyholders everywhere. You can call either the National Insurance Crime Bureau hotline at 1-800-TEL-NICB or the
Maryland Auto Insurance Hotline at 1-800-500-0333 to make your report. Calling either hotline is free and anonymous.