What Happens When You Commit Car Insurance Fraud?

Auto insurance fraud  in the United States costs  insurance companies billions of dollars every year. These losses are then passed on to consumers in the form of higher rates and premiums. It has been estimated that the average policy holder pays several hundreds dollars extra each year due to frauds committed by other people.

Not only does auto insurance fraud end up costing everyone more money, it can also land you in jail. The penalties for those who are caught committing auto insurance fraud are severe. You will likely face a fraud lawsuit, a criminal conviction and several years in prison. You could also face serious fines, as well as paying back everything you stole from the insurance company.

Every state considers auto insurance fraud a criminal activity and assess jail time, as much as several years per incident, as a punishment.

If you are caught committing auto insurance fraud every incident will go on your permanent criminal record as fraud and possibly as theft. This means future background checks will always come back with your criminal record showing. This could keep you from securing a job, a house and car insurance.

Most states also assess stiff fines, as high as tens of thousands of dollars, plus restitution money for each auto insurance fraud crime you commit. Each state is different, but every state has similar harsh financial penalties.

There are two types of auto insurance fraud: Hard and soft. Soft fraud can be easy to commit, even accidentally. You can avoid soft fraud by reporting all injuries and damages as accurately as possible. Always be completely honest and unbiased when reporting an incident to your insurance company.

Penalties for hard auto insurance fraud are even more severe. In these instances someone has to set out to intentionally defraud the insurance companies, seeking to secure payments without merit.

When it comes to auto insurance fraud, remember, honesty is always the best policy. If you cheat the insurance company, everybody loses!

Free Auto Credit Score

Know YOUR Auto Credit Score?

Free Credit Score

Auto Loans

Get Financed Regardless of your Credit