How fraud affects car insurance quotes

Fraud, and its resulting increase in prices, threatens nearly every industry. This is especially true for all types of insurance. Car insurance providers lose millions of dollars on fraudulent claims every year. If you are looking for car insurance quotes, you should know how fraud affects the quoted rates so you can make an informed decision about policy selection.

Impact on Rates

While there are many factors that affect your rates, the one that often has absolutely nothing to do with you is fraud. When insurance companies lose money due to fraud, they pass on those losses to all customers through higher rates. Also, all drivers, including those who commit fraud, are required to have insurance. This means that some insurance provider must provide coverage to those drivers. It is likely that your own rates will increase as result because the insurance company will protect itself against possible claims from such drivers.

Reduce Impact of Fraud

There are several steps you can take to help lower insurance costs. Always notify the police if you are involved in a car accident. Having an official report of the incident can prevent fraudulent claims. Notify your insurance company immediately if you are asked to engage in fraudulent activity of any sort. Always be honest. Do not try to get cheaper rates by registering your vehicle in an area with lower rates or by not disclosing the names of everyone who will be driving your vehicle. Chances are you will be caught, and the cost of insurance becomes even higher for everyone.

Review Insurance Providers

If a particular insurance company has been in the news recently discussing fraudulent claims, you may want to avoid that company. Each insurance provider has to maintain their own financial health. This means that certain insurance companies are simply bad to deal with because they are not financially stable. You can get information on insurance companies from Standard and Poor's, including a financial snapshot, prior to purchasing a policy.

You can still use car insurance quotes to get lower rates. Car insurance quotes allow you to compare your options so you can take advantage of the best deal offered.

You just need to take a few extra steps to find the companies that have the best protection against fraudulent claims so you know you are getting the absolutely lowest rate on your insurance.