Car Insurance Fraud

By John Chov

Car insurance is required (at least at the liability level) in 45 states of the US, and even in the states where it's not required, it is a very good idea. Car insurance is basically hedging your bets on accident rates. While you may be the best driver on the road, the other people out there may not be.
As something that is practically mandatory to have on your vehicle, insurance is something everyone should take the time to study.
Do the time to comparison shop, and do not always go with "the lowest rates". The most common scam is the "Hook and Hammer". Some small vendor will run TV or internet ads with The Lowest Rate Ever, sign you up for it, and then, two months later, the insurance carrier (who was simply billed too little) will send you a bill for a cumulative rate error and insufficient payment penalties. These insurance agents rely on a lot of "customer churn" to make their money work, and most of them are out of business within two years.
To avoid getting burned by this sort of scam, take the time to ask how long your insurance agent's been around, and take a look at their insurance rating. Insurance ratings range from D all the way up to AAA; the big national insurance carriers (like Progressive and GEICO) tend to be in the AAA and AA range. Local insurance agents can go lower. As a general rule of thumb, don't take insurance coverage from an agent with a rating worse than B, no matter what the initial price is.
The second scam isn't a scam so much as insurance carriers relying on you to be lazy when it comes to renewal time. Take a moment to sum up a year's worth of insurance premiums for your car. Then, before you sign the renewal, go to an online site and do a price comparison for your region. Also look at factors that may have changed - if you've gone three years without an accident or ticket, you can get a safe driver bonus. If you have recently moved, your new neighbourhood may bring your premiums down (or up). If you've just gotten married, or just aged out of the "trouble" demographic (18 to 24), it's worth doing some price shopping. While it may not seem like much, spending a few hours of comparison shopping to save $10-15 more a month on insurance, over the course of a year of premiums, it adds up fast.
As with anything you buy, it pays to pay attention. Shop smart for insurance and avoid the scams and "lazy renewals".

Article Source: [http://EzineArticles.com/?Car-Insurance-Fraud---Avoid-These-Auto-Insurance-Scams&id=873950] Car Insurance Fraud - Avoid These Auto Insurance Scams