Tips on Preventing Auto Insurance Fraudby Steve Cypher on Monday, October 15th, 2012
Here at Auto Credit Express we’ve spent the last twenty-plus years helping car shoppers with credit problems find dealers for their best opportunity at auto loan approvals.
Because these bad credit auto loans typically come with higher-than-average interest rates, we also try to educate applicants on the need to reduce expenses wherever they can – and, in particular, paying attention to, and shopping around for, the best possible auto insurance rates.
But according to the National Association of Insurance Commission (NAIC), looking only at the bottom line while ignoring the signs of possible insurance fraud can cause car owners more than just headaches as “taking a shortcut when it comes to your insurance could prove catastrophic and costly.”
If it seems too good to be true
It began when the economy took a turn for the worse with auto insurance scams taking place in states ranging from New Jersey to California and in between (Florida). But according to NAIC, doing your research, along with using a little common sense, goes a long way in avoiding being taken for a ride, so to speak.
“What seems too good to be true often is,” said NAIC CEO Dr. Therese (Terri) Vaughan. “Consumers need to be extremely careful not to take a shortcut with their insurance, which, in the long-term, can affect the safety and security of themselves and their loved ones.”
Unfortunately, being taken in by a fraudulent insurance agent or company is doubly bad – not only are you out the money you paid for the policy, the same transaction could unknowingly leave you without lawful insurance coverage on your vehicle.
There are ways that you can protect yourself. The first step is to rely on your state insurance commissioner. “State insurance regulators are always on the lookout for these individuals and companies,” continued Vaughan. “Consumers can always protect themselves through proper research and vigilance.”
Steps to take
According to those in the know at the NAIC, consumers should take the following steps before purchasing a new policy:
1. Stop before signing any paperwork or writing a check.
2. Call your state insurance department, which is easily reached by phone.
3. Confirm that the company or agent offering insurance is legitimate and licensed in the state.
Insurance agent fraud
Even after you’ve verified that the company is legitimate, an agent working for that company can collect your money without delivering a policy to you. You will know if this happens if you haven’t received an identification card or a copy of your policy in a timely fashion. According to the NAIC, if this happens, here is what you should do:
• Contact your state insurance department to file a complaint against the insurance company.
• Visit www.naic.org and completing the form provided by the Online Fraud Reporting System (OFRS). Through the OFRS, consumers can take a proactive role in identifying and reporting insurance fraud.
The Bottom Line
When purchasing an auto insurance policy, be sure you’re doing business with a legitimate insurance agent that represents a reputable insurance company. For more information on this topic, be sure to visit the web site of the National Association of Insurance Commissioners at www.naic.org.
One more thing to keep in mind: at Auto Credit Express we match applicants that have poor car credit with dealers that can give them their best chance at auto loan approvals using lenders that report these loans as well as loan payments to the credit bureaus.
So if you’re ready to reestablish your auto credit, you can begin now by filling out our online auto loans application.