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Everything That You Have To Know About Insurance Fraud. Ever since insurance was invented, so was insurance fraud. Auto fraud and life insurance fraud are some of the types of fraud that you may encounter if you already have an insurance. This article is very beneficial for those people who have insurance since it will give them an insight of what fraud really is. Probably the main reason why people would commit fraud is for their own benefit of gaining money. There are definitely a lot of policies which can be filed against those people who commit fraud, thus, it is very easy for these people who commit frauds to be exploited. Aside from inflating the value of the lost item, insurance policies are commonly exploited by individuals claiming more loss than what they have gained. Insurance fraud comes in two classifications which are known to be soft fraud and hard fraud. As you have known, there are two classifications of fraud which is known to be the hard fraud and soft fraud, however, the most common and popular is probably the soft fraud. When an insure party is known to be a legitimate claim, then this type of fraud will occur. Soft fraud, for example, happens when an insured individual is involved in a car accident and claims that more damage was done to the vehicle than is true. There are different thing that may happen if an individual who purchased a policy has misinterpreted the actual situation in order to get a lower premium, with this kind of situation, the soft fraud can happen at the start of a new insurance policy. This kind of fraud can also happen to those people who opt to buy a car, they would get a car insurance policy, however, they won’t tell the truth about the miles on the vehicle, in that way, they can gain a lower premium.
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Hard fraud is when someone plans a loss to receive an insurance payout. People with stolen vehicles are usually the ones who are involved in this kind of fraud. Hard insurance fraud are usually involved in different forms of crimes.
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Auto insurance fraud is one of the most common types of fraud. It is estimated that in 1996 as much as 36 percent of auto-insurance claims were fraudulent in some way. There are different reasons why soft fraud may occur, and everything stated above are all parts of fraud, and also, those situations where an individual claims an accident that did not actually occurred, or if ever there is an individual who registered its automobile in a location which the insurance is less expensive. For example, a person who lived in an urban area will opt to register his car to a rural area in order to gain a lower premium.