In movies and TV shows, we see insurance fraud in the form of burning a business down to file a claim, or hiding a car so you can say that it was stolen. In truth, these scams make up a pretty small minority of insurance fraud. The most common form of auto insurance fraud is "soft fraud."
What Is Soft Fraud?
In car insurance, soft fraud is when you take legitimate damages, and exaggerate them so that you can make a larger claim.
If someone has been neglecting repairs, for instance, they might take advantage of a minor fender bender and claim that their car was totaled, or that it suffered extensive engine damage, even if the only claims resulting from the accident were superficial.
This also applies to injury. Claiming whiplash when the truth is that you barely felt the impact in the first place, for instance. Intentional soft fraud is generally a crime of opportunity. Someone who may be entitled to a few hundred dollars in repair costs decides to seize on the chance at claiming a much higher amount.
Is All Soft Fraud Intentional?
Accidental soft fraud is pretty common. Plenty of people have gotten into trouble with their insurers because they unintentionally overstated or overestimated the damages. This is why it's important to keep a solid record of an incident. Here's how:
- Take photos following any accident, however minor.
- Take notes on any injuries or damages sustained. You can jot them down or record them onto your phone through a voice recording app.
- Get a quote from a mechanic, and talk to a physician.
- Keep your story straight. Memory is not infallible, and events have a tendency to change shape in our minds over time. So, refer to those notes and photos you took at the scene of the incident and make sure that you're not fudging any details.
Soft fraud is considered to be a misdemeanor, which can result in jail-time or fines. At the very least, you're probably looking at a denied claim and dropped coverage. So, when filing a claim, be honest, be factual and be precise.