What is double-dipping an auto insurance claim? If you would like to learn more, you are in the right place. Here is a guide you can read through to find just what you are looking for. Without further ado, let’s dive into it.
Undoubtedly, it can be intriguing and enticing to use every resource possible to get compensation for physical injury or damage after a car accident. This can cause a lot of people to file claims with 2 different insurance providers for the same claim. This usually happens with a health insurance company or an auto insurance company.
Although this may seem harmless, this is known as double-dipping. Imagine, going to a Super Bowl party and double-dipping with the chips and guacamole. It will cause some frowns from others. The same goes for double-dipping on an auto insurance claim. For more details about this, keep scrolling to find out more.
What Is Double-Dipping an Auto Insurance Claim?
Double-dipping when it comes to car insurance is the act of filing more than one claim to different insurance companies. For instance, if you get involved in a car accident, you file a claim to one car insurance for damages to your car and to another for medical bill coverage. On the other hand, this act can come with serious negative effects. Firstly, double-dipping on car insurance can take you to court and will be requested repayment. Secondly, this can cause your insurance company to terminate your insurance policy for breaching the contract.
Types of Car Insurance Fraud
There are different forms of car insurance fraud and they include the following:
- False claims.
- Staged accidents.
- False applications.
- Rate evasion.
- Vehicle dumping.
- Multiple claims.
These are the common forms of auto insurance fraud that many claimants are involved in to get compensation for damages and injuries.
What Other Things are Considered Auto Insurance Fraud?
Apart from double-dipping on car insurance, lying about anything is considered fraud by auto insurance companies. When creating a policy, it is not also a good idea to hold back on any information. This is because lying about anythingcomes with serious consequences. Besides, every state has its special consequences for fraud. For example, if you commit auto insurance fraud in Florida, depending on the seriousness of your crime, you can spend up to 30 years in prison. In addition, lying about anything can affect careers, marriages, and even friendships.
How Does It Work?
Double-dripping happens when a policyholders file two different claims for the same accident. Moreover, these claims are filed by different insurance companies as well. For example, a person gets into a car wreck and contacts one insurance company to file a claim against damages. Then, goes to another car insurance provider and files a claim for medical expenses. However, performing this act is illegal and can get you charged for fraud.
Why Is Double-Dipping Illegal?
If you double-dip a car insurance policy, overpayment takes place and it is considered theft to the insurance provider. Apart from this, the insurance company will consider such acts as a breach of their contract, resulting in legal actions. Hence, do not engage in getting compensation or reimbursement for the same loss from different insurance companies.There are different forms of car insurance fraud and they include the following:
- False claims.
- Staged accidents.
- False applications.
- Rate evasion.
- Vehicle dumping.
- Multiple claims.
These are the common forms of auto insurance fraud that many claimants are involved in to get compensation for damages and injuries.
What Are the Consequences of Double-Dipping an Auto Insurance Claim?
There are severe consequences of double-dipping an auto insurance claim. Some of them include:
Claim Denial
If your insurance provider finds out that you have double-dipped, your claim might be denied altogether. Hence, you will be responsible for the damages and injuries incurred.
Legal action
Insurance fraud is a serious offense that is not taken lightly. You can face legal consequences like imprisonment and fines if you are caught.
Policy Cancellation
Insurance providers can choose to terminate your insurance quote involved in double-dipping. In the future, this can prevent the person from getting any form of insurance from any insurance company and may lead to higher premiums.
Reputation Damage
If you are caught double-dipping a car insurance policy, you will be charged for insurance fraud and this can damage your reputation. This, you will have a problem getting financial services and insurance in the future.
What Happens If You Get Caught?
If you are caught double-dipping an auto insurance claim, this is a crime that comes with legal action. The severity of your crime and the law of the jurisdiction determine the penalty you get. Additionally, apart from legal consequences, you can face restitution payments, fines, or other financial penalties. In some cases, the individual may need to compensate the insurance provider for any fraudulent claim that was covered.
How To Avoid Auto Insurance Fraud
Avoiding car insurance fraud is important for both policyholders and insurance companies. Here are some tips to avoid auto insurance fraud:
- Document the accident scene.
- Be careful of staged accidents.
- Understand your quote.
- Report any suspicious activity.
- Use reputable auto repair shops.
- Do not provide false or incorrect information.
- Keep records.
- Be careful of insurance scams.
- Educate yourself.
- Be up to date.
With these tips, you can protect yourself from car insurance fraud and help mitigate the fraudulent acts in the world of insurance.
