3 New Jersey Taxi Companies Were Charged With Insurance Fraud

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Car insurance is mandatory in every state except Virginia and New Hampshire, but that didn’t stop a New Jersey family from dispatching unregistered drivers in uninsured vehicles from their three taxi companies.
Aziz, Michael, and Theresa Ibrahim were arrested on September 8 for insurance fraud after a four-month investigation by the Hudson County Prosecutor’s Office. All three were scheduled to appear in court on September 14.
Fraud schemes like this happen more often than you think. They cost insurers billions every year, and those costs end up increasing your premiums to the tune of about $300 a year for every driver.
An illuminated taxi sign on top of a car
Lying to your insurance company is never a good idea.

What did the insurance fraud investigation uncover?

For four months, prosecutors investigated the Ibrahim’s three companies—A1 City Corp., 4M Enterprises Inc., and AAA City Bergen Inc. What they found went way beyond carelessness.
According to Insurance Business Magazine, detectives went undercover, hailing for airport rides with taxis from the three companies. By the end, investigators found that none of the vehicles owned by the companies were lawfully registered with the state of New Jersey.
Aziz was charged with second-degree insurance fraud and third-degree conspiracy to commit insurance fraud, while Theresa was charged with two counts of third-degree insurance fraud. All three of them were charged with conspiracy to commit insurance fraud and Michael was charged with conspiracy to commit perjury.
As the case proceeds into court, the investigation continues. The police are asking anyone with information about the three companies to come forward.

How does insurance fraud affect premiums?

The Insurance Information Institute says insurance fraud, excluding health insurance, costs the economy about $40 billion every year. Once that trickles down to consumers, it means an average of $400-700 for each individual.
Edmunds says that $300 ends up baked into your car insurance premiums. Insurance companies include the risk of loss due to fraud into their rates so the crimes against them don’t end up hurting their bottom line.
Fraudsters often lose out too, once they’re caught. Besides time spent behind bars and financial penalties, these criminals have a very hard time getting any coverage once their sentences are up.

How to protect yourself from insurance fraud

You can’t do much about insurance fraud costs increasing your premiums, but there are other ways to prevent fraud from hurting your pocketbook.
Most scams aren’t as elaborate as an uninsured taxi service empire. Many schemes involve fraudulent damage and injury claims during legitimate accidents. If you end up in an accident, thoroughly document every detail of the incident and take pictures to avoid getting scammed.
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