The Consequences and Penalties of Auto Insurance Fraud
by Leigh Jackson
Some people think that auto insurance fraud is a quick way to profit from an accident. By defrauding their insurance company about an accident or injury that never happened, criminals are costing insurance agencies billions of dollars each year in the United States. Because of this, new penalties and criminal charges are being enforced more strictly to counteract this criminal behavior.
What is Insurance Fraud?
Insurance fraud happens when people fake or over-exaggerate injuries or damage that takes place in the event of an accident. Insurance fraud also includes people who stage car thefts or who plan accidents in order to file a claim and get insurance money. Any false claim or act of trickery that leads to a claim is classified as insurance fraud.
Hard vs. Soft Insurance Fraud
There are different types of insurance fraud that can occur. The first is soft insurance fraud. Soft fraud includes minor offenses, things like opportunistic over-exaggerating or taking advantage of a person or situation. This is most common in situations where medical trauma or problems are faked or made to seem worse than they are. This is the most common type of insurance fraud because it is the easiest to fake or exaggerate injuries when the damage is subjective.
Another type of insurance fraud that occurs is hard insurance fraud. In a hard insurance fraud case a person might stage a car theft collaborate with someone else to plan an accidental collision in order to set up a situation where insurance companies get involved to pay for the damages.
Different states have different laws with regards to insurance fraud and so penalties and criminal convictions vary depending on where you live. Depending on the severity of the fraud, you can be charged with a criminal misdemeanor or a felony for committing any type of insurance fraud.
The vast majority of auto insurance fraud convictions are criminal misdemeanors which result from soft fraud being committed. Soft fraud is exaggeration and is sometimes committed without malicious intent. It is classified as fraud and as a misdemeanor nonetheless because it involves lying to an insurance company about the state or nature of the injury or accident in order to receive a bigger payout.
When someone who commits insurance fraud is caught and convicted the result is generally a misdemeanor conviction and the consequences range from a fine, probation or loss of drivers license to jail time. Fines for misdemeanors don't exceed $15,000, but this amount can far exceed the amount a criminal attempts to defraud his insurance company for.
In recent years insurance companies have increased efforts to investigate false insurance claims. Companies now have specialized teams of insurance fraud investigators with backgrounds in law enforcement that can resolve fraud issues much faster than before. This process has lead to a significant decrease of payouts from fraud claims.
<b>About the Author</b> - Leigh Jackson has been writing for the <a href="http://tinyurl.com/a6fn22h">Texas auto insurance</a> and business industry since 2010. Jackson specializes in advice and strategies for <a href="http://tinyurl.com/bfs9zxa">online auto insurance</a> and getting affordable auto insurance rates.
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New Unique Article!
Title: The Consequences and Penalties of Auto Insurance Fraud
Author: Leigh Jackson
Email: jreyes@thanksal.com
Keywords: auto,insurance,advice,crime,business,finance,money,car,safety,home
Word Count: 473
Category: Business
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