Insurance fraud had been one of the most common and widespread fraud reported in the world. Cars are expensive products and most of the people have many expensive auto insurance policies on it. To gain illegal monetary gain, people try to use illegal methods on their insurance policies. These illegal methods comprise of insurance fraud and car theft fraud.
Insurance fraud has been divided in to two kinds. One is the soft insurance fraud while the second one is the hard insurance fraud. The soft insurance fraud involves cheating or lying to the insurance company on paper. Soft automobile fraud includes policy owners lying and reporting for many claims on a single injury. Some people also claim for injuries that have not occurred due to a car accident. Lastly, many people mention incorrect information to the insurance companies in reporting the real cost of the damage.
Basically under soft fraud, people provide false information during the filing of their insurance claims.
Hard insurance fraud occurs when any policy holder tries to stage or lie about actual accidents or when a person would actually file for medical bills and treatments unrelated to a car accident. Another example would be filing for claims when the policy holder had nothing to do with the accident. Many people also use identity fraud by using wrong state number plates so as to get lower insurance premium costs.
Another example would be driving in the name of your father, when you can actually get the car insured under your name. Excellent insurance companies deal with all the cases of car theft and at the same time they are very strict against people who are willing to commit fraud. They do not hesitate to report to the authorities of any insurance fraud suspicions.
Hard insurance fraud also occurs when many people abuse the car theft policy. The abuse in the car theft policy occurs when the policy holder or the owner of the car reports falsely that his car has been stolen. After he reports the vehicle stolen, he tries to destroy the vehicle to get maximum claims under his car theft insurance policy. This car theft plot has known as owner give-up. Many owners also carry out a fraud known as a 30 day specials. During a 30 day special, owners hide their cars for 30 days and wait for the insurance company to pay for the settlement. Once the bill has been settled, many cars are found in a deserted area.
Apart from individuals, many crime rings also commit insurance fraud. These rings commit a fraud by using the export route. This export route begins by purchasing a vehicle on money obtained from a bank in form of a loan. Once the car is bought and an insurance policy is issued, the ring then exports the car out of the country to be sold in the black market. In the mean time, the crime ring reports the car to be stolen in their country and collects the subsequent money from the insurance claims.