Last updated on November 11th, 2019
Car insurance, like any kind of insurance, is an essential part of any well thought out financial plan. You may not like paying the bill you’ll be glad you have that safety net in place if you ever need it. Car insurance covers you in case of an accident, theft, vandalism, and more.
Every car owner needs a car insurance policy, but if you get scammed it can be one of the biggest financial mistakes you can ever make.
There are many types of scams that are designed to prey on the ignorance and negligence of people. And unfortunately many people fall prey to these deceptions.
The best way to protect yourself from being scammed is by being aware. So here are some of the common car insurance scams you need to look out for:
Staged Car Accidents
You might have already seen some videos where people are intentionally jumping onto cars or causing minor fender benders on purpose. These types of staged car accidents include rear-end collisions, left turn yield collisions and parking lot collisions.
These are especially common in no-fault states where your insurance provider pays for your damages regardless of whether the accident was your fault or not. Many policyholders end up getting compensated where it wouldn’t be due.
Insurance Rate Switching
Some insurance companies lure new clients by offering huge discounts, low initial rates, and other cost reductions only to jack up the rates when it comes time to renew your policy. Other companies offset the lower charges by providing less coverage or increasing deductibles.
Extortionate Mechanic Repairs
Whether it’s in the unnecessary additional charges for repairs your car might not even need or the use of substandard replacement parts that may need additional repairs later on, some unsavory mechanics will take advantage of car owners in their time of need.
While most agents are trustworthy, there will always be outliers. Some agents may go as far as to pocket your insurance payments without performing what they are mandated to do. If that wasn’t bad enough, the worst part is when you attempt to file a claim only to find out that you’ve never even been covered by an insurance policy.
It’s important to only deal with independent agents that you trust. And if you don’t have an agent you trust, it’s also highly recommended that you only deal with reputable companies like Allstate auto insurance. A great way to gauge the quality of a company’s service is to read client reviews.
While it’s a difficult task to differentiate those you can trust from those you can’t, with vigilance and awareness, you’ll be better armed to detect an attempt to scam you. Money is difficult to come by. Remember to only work with people you trust, especially when there’s a lot of money on the line. Make the right financial moves, minimize expenses and maximize profits.
Andrea Schmidt is a staff writer for Wealthy Turtle. She’s a stay at home mom who loves to write about paying down her family’s debt, living on a budget, and exploring new side hustles to earn extra money.