Insurance Fraud

Every now and then you hear about auto insurance fraud and you wonder how it can possibly affect you. However, the ramifications of auto insurance fraud are not limited to the people who are involved in the case; it is spread out across everyone who has a car insurance policy and everyone who hopes to get an auto insurance policy.
 
When people perpetrate auto insurance fraud on their car insurance company, they get money for that claim. However, who ultimately pays for that claim? It comes from the other policyholders. Every time that an auto insurance company has to pay out on a fake claim, the rates for everyone else go up as well.
 
So one person gets money and basically everyone else pays for it. This is why it is illegal – it is essentially stealing from everyone else that pays into the pool. If an auto insurance company has very little claims against that same pool, they are able to reduce rates for all of their clients. But when they have a lot of claims they have to increase those rates.
 
The latest example of this was a case in New York where an attorney paid doctors and nurses, etc. to give him the names of people who had been in car accidents. These people were covered under no-fault auto insurance laws and so they got various services paid for by the auto insurance companies. The attorney would give their names to medical clinics that would claim that they had seen the patient and therefore get paid by the auto insurance companies for their services; services that they had the patients exaggerate so that they could make money off of them.

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