How Staged Accidents Can Cause Your Insurance To Skyrocket Article

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How Staged Accidents Can Cause Your Insurance to Skyrocket

Every year, it has been estimated that about 10 million car accidents are reported to insurance companies all over the country. What is alarming and saddening is that while a significant number of these are actual accidents, a significant number are fake.

Author: Sukhdeep

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What do we mean by fake? We mean accidents that may never have happened at all, or were merely staged. What would a policy holder get from a staged accident? you may ask. Well, easy money for one thing. Individuals who are desperate for some quick cash may try to get it with a few dents or scratches to their vehicles. In fact, staged accidents are one of the biggest problems that car insurance companies currently face. Fraud from across the board may cost insurance companies up to $30 billion in expenses in one year alone!

There may be those who believe that with this $30 billion loss, only the insurance company is affected. Other policyholders and “ordinary people” are not affected at all. In fact, some may even go so far to say that since these companies are raking in so much money already, then they can easily shoulder this expense, and still have plenty left over for their yearly profits.

We’re here to tell you this is an extremely wrong way of thinking. Staged accidents and insurance fraud ultimately affects all of us. How? Well, insurance companies need to find ways to raise money to cover the costs of insurance fraud. So, what do they do? The most logical thing for them to do is to raise the cost of premiums all across the board. Yes, no one is exempted.

The loss in money is partly shouldered and passed down to auto policy holders.

In fact, when staged accidents and insurance fraud are proven, the effects could be very bad, not to mention very expensive for everyone else. To give you an example, a series of fake accidents were uncovered in New York City from the years 2007 to 2009. As a result, insurance premiums in the Big Apple rose up to four times as much, compared to the previous years! Altogether, the amount that everyone had to pay was around $229 million, or an average of $628,000 per day!

When someone decides it’s a great idea to stage an automobile accident in order to get easy money, what they do not consider is how it affects everyone else. These people may not personally pay now, but they will in the coming years, through ridiculously expensive premiums, especially for them, since they will be put under a new risk category.

The sadder reality is that because of one or a few persons’ thoughtless actions, everybody has to share the burden of paying for higher car insurance coverage. At the end of the day, just don’t do it! It really isn’t worth it! Some petty cash that you will get today will still result in many years of paying for it!

Sam Briones is a freelance writer who covers topics ranging from finding the best car insurance to driving safety tips.

About Author

Sukhdeep Singh

http://www.safeauto.com

Article Source: http://www.1888articles.com

How Staged Accidents Can Cause Your Insurance to Skyrocket