Double-dipping usually conjures up images of taking a potato chip at a party and dipping it in the ranch dressing after taking a bite. A double-dipping insurance claim, however, is an entirely different issue to deal with.
Double-dipping occurs when someone files two separate claims for the same accident, usually after getting in a car wreck. It can happen in different industries than just the auto insurance business, though.
Filing twice on the same problem is going to get you in hot water for fraud. Insurance companies can sue you for this action, and you’ll also have a hard time getting insurance in the future. We’ll talk about why people do this and how you can avoid making this mistake.
Why would someone double-dip on insurance?
It can be very stressful when you get into a car accident and your auto insurance policy doesn’t cover all the expenses of the wreck. If you only have basic liability coverage, you may be left out to dry with medical expenses and other physical and emotional damage. This can leave you wondering where the money is going to come from to make up for the difference.
Double-dipping in this case would seem like at least a sympathetic and reasonable reaction to not having the means to pay for your accident’s fallout. Most of the time, this is not the reason people double-dip, though.
Often people have the right coverage for their accident, and they see if they can get extra money for no reason from another filed claim. Customers need to realize they are messing with their insurance company’s finances when they try to double-dip.
When you double up on your insurance, it’s the same as going into the store and shoplifting. You’re stealing something. Believe it or not, regular folks can definitely get in trouble with the law when they double-dip.
Insurance Companies’ Big Legal Teams
It may feel like you aren’t doing anything wrong because the insurance company has a lot of money no matter how many claims they have to pay out. StateFarm, GEICO, and Progressive are multi-billion dollar enterprises, but this is even more of a reason to not mess with them.
They will have the financial power and the lawyers to file a lawsuit against you and get the funds back that you have stolen from them. And “stolen” is the keyword here.
If you understand double-dipping on insurance makes you a criminal and a thief, you will not want that reputation and stigma attached to you for the rest of your life. It’s wrong to steal, so just don’t do it.
Sometimes people can get really creative in their double-dipping. They may stage accidents that don’t even happen. Folks might embellish their story of an accident to get more money from their insurance company. Claiming you are more injured than you actually are is common but rarely works in the long run for you.
Insurance companies are going to raise your rates after you get into an accident. Faking an accident is only going to make you have to find a different policy that is more affordable.
Legal Fallout of Double-Dipping on Insurance
Let’s dig a little deeper into the consequences of doing something like this. Because fraud is a criminal act, insurance companies are in their right to press charges against you. This can include lawsuits to get the stolen money back or even a prison sentence if the crime is severe enough.
Most of the time, a lawsuit is the extent of the consequences, but don’t risk worse things happening to you. Fraud is a serious crime, and you won’t have the legal team your insurance company has. It’s going to be nearly impossible to prove that you weren’t frauding their company.
Auo insurance is not the only time fraud can occur in the insurance industry. There are examples to be wary of in life insurance, too. People want to make sure they have saved enough money for their families if they happen to pass away. This can lead to desperate ways to obtain money.
Getting two different life insurance policies is not only expensive but having your spouse cash them both out upon your death is also illegal. Instead of doing something that could lead to financial downfall for your surviving family members, live a healthier life. Do things that will lead you to get a great life insurance policy for an affordable price.
Other Ways People Fraud Insurance Companies
Double-dipping is just one of the ways people deceive their insurance companies to get more money. Let’s talk about some of the other things you should never do to lie to your insurer, and the consequences if you choose to do so.
Auto insurance can be more expensive if you move to an area that is high in crime. This is because the insurer worries you will be more likely to file a claim for theft in a bad area, even if you only need car insurance for a parked car. To combat this, people will lie about the address they live at, listing a safer location on their application like a family or friend’s place.
If the insurance company finds out about this, they will most certainly drop your coverage and sue you for the money they lost on the policy. They will estimate what your coverage would have been if you were telling the truth about your place of residence.
People might try to bend the truth about the condition of an older home when they move in to get better homeowners coverage. This could range from ignoring water damage in your shower to trying to mislead about the age of the house.
There’s a small chance insurance companies won’t find out about this type of lying, but it doesn’t outweigh the risks of being dishonest. Legal consequences will come down on you and make life much harder than it would have been. Just be truthful and shop around for the best rates. You’ll find that the safer choice is usually the smart one in life.
Shawn Laib writes and researches for the auto insurance comparison site, 4AutoInsuranceQuote.com. He wants to inform people of the value of being honest with their insurance companies.