Every year, car insurance companies pay out millions of dollars in fraudulent claims. The claims can range anywhere from staged pedestrian accidents to inflated injury claims stemming from a real accident. While the vast majority of us do not engage in such dishonest behavior, we are still affected by them. How?
Every fraudulent claim raises the cost of doing business for the car insurance companies, and therefore raises the price of car insurance premiums. For every claim made that has no basis in reality, it is costing you money! Doesn’t that upset you? It should!
Now, admittedly the insurance companies themselves are partially to blame for this. Shysters who game the system know that most insurance companies will settle a claim quickly rather than pay the high costs of litigation in court. It’s really a numbers game for them. Why pay the high costs of court fees and lawyers when they can easily settle for a fraction of the cost?
How, then, can we fix this very broken situation. First, put some pressure on your elected officials to change the way litigation is done in this country. If a person is held liable for ALL the costs of a lawsuit if they lose, there would be much less tendency to bring the lawsuit in the first place. Given that, insurance companies would be much less willing to settle if they knew they had a chance of winning in court at less cost.
Second, pressure your insurance company to fight out any claim against you that you feel does not have merit. Threaten to change companies if they will not cooperate. Insurance companies, like any other business, will respond to customer pressure if they feel their profits are being threatened.
Finally, make sure that everyone you know is informed of the issue and takes the same actions. One person is not likely to make that much of a difference in reducing fraudulent claims and the resultant higher costs of insurance, but many people taking the same actions will make a tremendous difference. Remember this article as you fill out the check for this month’s installment on your car insurance premiums. You can make a difference!