Massachusetts car insurance rates are affected greatly by various types of automotive fraud. Times are tough and the economic downturn has affected people everywhere, from Massachusetts all the way to California and everywhere in between. While most people seek legal and ethical means to find ways to pay their bills there is another contingency of people who try to find ways to beat the system. Of the many ways that these people try to obtain money illegally, a very popular way is through Massachusetts car insurance fraud.
Car insurance fraud occurs when an individual files a false claim with their insurance company regarding their vehicle. It is also considered car insurance fraud if a person receives money from their car insurance company to pay for damages and uses those funds for other reasons. The other part of fraud is hindering an investigation by an insurance regulator. The most common type of car insurance fraud is filing a false claim.
Some people will file a false claim regarding something small such as running out of gas, calling for a tow, and then making a claim with their insurance company that their vehicle broke down in order to get the towing fees paid for. This may seem minor to you, however it is you and other people like you who pay for the costs of false claims. Companies that provide Massachusetts car insurance coverage must ensure their own profitability for the long run.
Some fraud is perpetrated by greed while other people participate in fraud because they are desperate and they do not see any way out of their financial situation. Some more severe cases of fraud occur when a person claims that there car was stolen, vandalized, or they fake an accident in an effort to get the maximum amount of dollars for their vehicle. This kind of fraud is the most expensive for insurance carriers because increased fraud causes Massachusetts car insurance rates to increase for all insurance consumers. Contact the National Insurance Crime Bureau for advice on how to prevent insurance fraud.
Not every state is seeing an increase in premiums, however. Massachusetts, for example has actually seen a decrease in insurance carrier's premiums because there has been a reduced number of fraud claims. Places such as Nevada continue to rise because fraud claims increase year after year.
Many people who commit car insurance fraud believe that it is a victimless crime, which is why they do not lose sleep over it. However, just like any other company, insurance companies do not pay for the fraud themselves; they pass that cost on to their customers. Every time someone commits what they believe is a 'victimless crime' they are actually causing the insurance rates of everyone who has insurance with the company they committed fraud on to rise.
Massachusetts car insurance is required by law for every motorist in the state, which makes it impossible for people to avoid the costs associated with fraud. Not every state can be like Massachusetts where fraud incidence is low and rates are going down. If you are considering making a false claim with your insurance company, take care; there are heavy fines and jail time associated with committing fraud and suddenly it is a very big deal for you.