Stephen : Neveda : I keep on reading that the insurance auto insurance premiums are rising on account of frauds in most of our states like New Jersey, Wiscoinsin and now Michigan auto insurance debate on rates is going on. How do you know an car insurance fraud.

Response : A great question Stephen, let me give you an idea that comparing auto insurance for different states is also a good excericse if you are involved in this field or matter of interest, however the rates which would apply would be the rates of the state where you live. That being said the auto insurance frauds have very much in common in all states.

Insurance fraud costs all of us in the form of higher automobile insurance premiums.It is an offence under the federal Criminal Code for anyone, by deceit, falsehood, or other dishonest act, to defraud or to attempt to defraud an insurance company.

Common types of fraud or attempted auto insurance fraud may include:
1) exagratting the quantum of loss or the repairs of the car
2) lying about the way a loss occurred,
3) filing fraudulent automobile accident or damage claims,
4) including previously existing damage to a vehicle when submitting a claim,
5) withholding information about past accidents, traffic convictions, claims, policy cancellations or non-renewals, other insurance in force, and medical and disability history, and
6) receiving payments for treatments not received.
Most of the time it frauds ocurr when the professionals like the lawyer, doctors and even the mechanics or the appriasals at times cooperate with the clients for monetary benefits.

Auto insurance frauds cost millions of dollars and these cost are passed on the the customers in the form of auto insurance premium hikes. There are certain regulations and laws to prevent auto insurance frauds or any insurance fraud and these are :
If you are caught committing or attempting to commit insurance fraud if you :
• Your claim will be denied.
• Your insurance policy may be cancelled outright.
• You may pay higher premiums in the future.
• You may be denied insurance in the future.
• More importantly, the offence is punishable, on conviction, by a maximum of 10 years’ imprisonment for cases involving an amount over $5,000 or otherwise a maximum of 2 years’ imprisonment.

Thanks.
Kamlesh

Andy Edmonds: I live in New York and was reading your blog on “No fault insurance“, when I decided to compare auto insurance quotes online. Are there any expected changes for this.

Response: As per the latest information received from on 24th November 2009, New York as per the statement of Superintendent James J. Wrynn said that they have made all efforts to stop the abuse of no fault insurance. The cost of each no-fault claim has gone up by more than half in the past five years, and all New Yorkers with auto insurance are paying for this. The department said its fraud investigations bureau received more than 11,000 complaints alleging no-fault fraud this year to date, a 7 percent increase over the total for all of 2008. The number of no-fault arrests in 2008 was 52 percent greater than in 2007.

As per Paul Magaril, regional manager of Property Casualty Insurers Association of America (PCI) the New York auto insurance rates are the second highest auto insurance premiums in USA. This is almost 50 percent more than the rest of the country. As per PCI the cost of the no fault system of New York the cost of claims is estimated $1.2 million per day. This is the result of frauds like over-utilization of health system. The medical cost is very high.

The Insurers think it is time to stop the frauds and make some changes which will come into effect from January 1st 2010. The changes would take time to be implemented and passed. However, here are the changes which are porposed :

The main idea behind this is to protect consumers the auto insurance frauds have to be stopped so that the low auto insurance rates are available for the customers.

I am sure we all would appreciate the changes, in the long run once we get low auto insurance quotes and start saving on car insurance.