Car Insurance Fraud: What You Ought to Know

Car insurance fraud is a growing problem that affects everyone. The money car insurance companies lose to fraudulent claims gets passed to consumers through higher insurance policy rates. You can also directly lose money if you are the victim of auto insurance fraud by having to pay deductibles and policy rate increases. Protect your finances by learning to identify car insurance fraud and how to protect yourself from becoming a victim.

What Is Car Insurance Fraud?

There are many types of car insurance fraud. Car insurance fraud ranges from people lying to insurance providers to get cheaper rates to organized crime rings that stage fake auto accidents to collect money from insurance companies. Some common types of insurance fraud are:

• Insurance policy scams: Fake insurance salesman sell bogus insurance policies to unsuspecting consumers
• Inflated claims: Claiming more damage than actually occurred to collect more money
• Fraudulent theft or damage: Having someone steal or burn a vehicle to collect money from the insurance company
• Staged Accidents: Staging an auto accident and claiming false injuries
• Runners: A scam where someone (the runner) directs a victim of an auto accident to a fake medical facility that will fake medical claims

How to Avoid Becoming a Victim of Car Insurance Fraud

Watch out

• Purchasing car insurance: Only purchase car insurance policies from licensed insurance companies or licensed insurance brokers and get a written copy of your policy (including what it covers). Read your policy to get a thorough understanding of what it covers.
• While driving: Keep plenty of distance between your car and cars in front of you. Trust your instincts. If another vehicle is acting suspiciously by driving erratically or too close to you, call the police and pull into a safe spot such as a police station or gas station.
• After an accident: Call the police and your insurance company immediately after an accident, no matter how minor the damage and get a police report or the incident.
• Avoiding scams: Never sign a blank insurance claim form. Be weary of bystanders, towing companies, medical professionals, or auto repair shops that try to pressure you to go to a certain facility for service or treatment, or try to pressure you to file false claims.

We can help you purchase a Colorado car insurance policy that fits your specific needs at affordable rates, and will provide you with continued service to prevent you from becoming a victim to insurance fraud. Call us today at Premier Group Insurance to get started.

Limited or Full Tort?

Whether you’re getting auto insurance for the first or fifth time, the hardest choice to make is whether you would have limited or full tort. The choice between limited and full tort is made even harder with the confusing definition available on most insurance companies websites. Ultimately, it’s important to fully understand this concept in order to choose the option best for you and your family

What is tort?
According to Merriam Webster, tort is “a wrongful act, other than a breach of contract, [through] which relief may be obtained in the form of damages.” For motorists, that means this type of insurance essentially pays damages to the insured after an accident. Specifically, tort covers injuries you may receive from a run-in with another vehicle. The other party must be at fault, otherwise the tort option doesn’t come into effect.
With full tort, you retain the right to sue the at-fault party for more than medical expenses and other accident-related expenses, such as pain and suffering. In essence, full tort is a security blanket for your family. If injuries from an accident force you to rack up medical bills, rehab bills and remain out of work, your ability to sue for damages, including pain and suffering, can greatly ease the burden.

Which is right for me?
The main appeal of limited tort is the price. It’s considerably cheaper than full tort, and property damages and injuries are still covered. Limited tort, however, restricts what policy owners can include in a civil suit. Some major exceptions exist, which may allow for some compensation beyond medical under limited tort. For the most part, policy owners lose only the right to sue for pain and suffering, but that can be a devastating if the accident severely injured you. 

Although full tort is considered the best option, choosing what’s right for you should be determined by your own needs and beliefs. One important question to ask yourself is whether or not you would sue the other party for damages. Although you would have the right to sue, you are never required to. If it goes against any beliefs you may have to pursue a suit, limited tort is just what the doctor ordered to help limit the cost of auto insurance. On the other hand, full tort provides the best security for your family, as it helps insure an accident doesn’t cause serious financial harm.

The truth is, there is no right or wrong answer. You have to decide whether or not you need the extra coverage of full tort, and if you can handle the extra expense each month on something you (hopefully) will never need to use. For more questions and to get a great rate on Colorado Car Insurance, contact an agent at Premier Group Insurance today.

The Truth about Active Safety Systems

One of the most valuable assets to come out of our technological renaissance can be found in the active safety systems in newer automobiles. Not only are these safety systems valuable because they prevent injuries and death by reducing accidents, but they’re also valuable in that they can help to reduce both Colorado auto insurance premiums and overall driver expenses.

How Active Safety Systems Help

Data from the Insurance Institute for Highway Safety in 2008 showed that forward collision warning systems could potentially prevent 2.3 million crashes in the United States annually. They also found that 143,000 crashes per year could be prevented with adaptive headlights that help drivers see better around corners and 417,000 accidents could be prevented with emergency brake assistance, a system that applies the break for a driver when it senses a forward collision is imminent.

The Possible Downsides

One concern that the Institute’s safety report mentioned was regarding how drivers would adapt to utilizing active safety systems—especially since many drivers weren’t even aware of their existence. In a May 2006 report ordered by the European Commission, researchers found that safety equipment did not play a major part in the sales process as auto sales professionals felt that their customers weren’t necessarily interested in the topic. A 2011 report delivered by European company, eValue, mentions the problem of creating a rating system for active safety technology in order to improve what they describe as the, "low awareness" of car buyers.

If you purchase a vehicle with an active safety system, it's important that you understand how the system works and how you need to interact with it for maximum efficiency. Without truly understanding your system, its notification method may produce anxiety while you drive and you may not fully benefit from the technology.

Retaining the Driver’s Personal Safety System

Even more important, perhaps, is learning to utilize the technology without relying on it completely. In 2011, Wired magazine discussed the occasional failure of active safety systems. In their piece, they mentioned the importance of active driving at all times so that drivers can be prepared to react appropriately to a dangerous situation when their active safety system unexpectedly fails.

Your vehicle’s active safety system is a supplemental product that can help lower your insurance premiums, but it’s not infallible nor is it a miracle cure for bad driving. Learn how to work with it and how to work without it in the event of failure.

Understanding Your Insurance Policy Stipulations and Conditions

In the past few years, one-time Disney star Lindsay Lohan has had a lot of trouble driving without incident. As such, she’s become pretty high risk in the eyes of the insurance companies. On her most recent movie set, the insurance company temporarily insuring her for the movie stipulated that in order to be covered, she must not drive during the months and weeks that she was working on the film. Unfortunately, she did not comply with this rule and—after getting behind the wheel of a rented Porsche—had yet another incident.

Luckily for Lohan and the movie company, the insurer did not cancel her policy, but because she was out of compliance with the stipulations and conditions of the policy, they certainly could have. It’s never a good idea for you to push the boundaries of your insurance coverage and test the limits of the insurance company’s patience. Instead, it’s best to have a full understanding of the stipulations and conditions in your policy, which can include things like:

• A liability insurance policy might require a certain course of action in specific situations.
• A home insurance policy may state that it is for a primary residence only, meaning that you can’t use it for a property that you rent out.
• An auto policy might stipulate that it’s for personal use—which makes using it for commercial purposes completely uncovered.
• All insurance policies can stipulate that the insured is not to hide any details of the claims from the insurer or otherwise commit fraud.
• A health policy could stipulate that a pre-existing health condition is not covered.
• An auto insurance policy may stipulate that unlicensed drivers are not covered.

The key to understanding the conditions and stipulations of your Colorado insurance policy is to actually read them. If you want to discuss how your policies work and any specific conditions that you’re concerned about, give us a call at Premier Group Insurance today.

Colorado Car Insurance

Calif., Colorado Consider Banning ‘Crash Taxes’

Legislators in both California and Colorado have proposed new laws that would prohibit communities from charging a fee when police and fire personnel respond to motor vehicle accidents.

The city of Sacramento recently adopted just such a “fire recovery charge” on out of town automobile drivers. Sacramento’s “crash tax” imposes a fee on out-of-town drivers who get into auto accidents in order to fund the fire department’s response services. The fee would be imposed on non-resident drivers if insurers find them at fault in the accident. But business owners who live outside the city but have property inside the city are exempt from the tax.

By Patricia-Anne Tom - Insurance Journal

Make sure you ask a Premier Group Insurance Agent about changes to your Colorado Car Insurance today!