Recently, seven citizens of Fargo, ND were accused of running a
car insurancefraud ring and collecting insurance money for profit after crashing into each other’s vehicles.
According to the
Grand Forks Herald, prosecutors in Cass County filed felony charges of conspiracy to commit a fraudulent insurance act and illegally conducting an enterprise against the Fargo residents.
At first glance, it may seem like this is a story that doesn’t directly affect you. After all, you go to work, pay for your own
car insurance, and only put in a claim when something actually happens—so nothing to worry about, right?
That’s not exactly the case—because the truth is, car insurance fraud, unfortunately, increases the cost of insurance for law-abiding citizens.
How did the Fargo citizens commit car insurance fraud?
According to the Grand Forks Herald, the North Dakota Insurance Fraud Division began to investigate the seven individuals after receiving an online referral from
Geicoabout a man named Steven Stone.
Geico stated that Stone had purchased a
liability-only policyfor a van he did not own and claimed he backed into the vehicle of Jamal Dantrell Neita—another individual accused of participating in the car insurance fraud ring.
Geico believes that Stone saw the van, wrote down the VIN number, and then purchased an insurance policy for it. In fact, Geico had four claims on file involving the very same van—suspicious claims all connected to others accused of participating in the car insurance fraud ring.
A further investigation actually found 15 claims totaling more than $67,000, and each claim had a similar story: the defendant bought a vehicle and was involved in a collision a few days later.
Crime doesn’t pay
It’s common for someone committing car insurance fraud to purchase a vehicle for a low price, crash it, put in a claim, collect the money, and then sell that vehicle and buy another.
As the Grand Forks Herald reports, insurance fraud is the most committed crime, and the second most profitable.
But while it might be profitable for the criminal (until he or she gets caught), it’s not so profitable for the U.S. consumer—because it costs them about $80 to $130 billion a year, according to the North Dakota Justine Department. North Dakotans alone lost $523,000 to fraud cases in 2020, and another $1.1 million in 2019.
That’s because insurance premiums go into a pool for claim payouts. In other words, law-abiding citizens are literally paying for the crimes of others through higher insurance premiums.
According to the
FBI, non-health insurance fraud actually costs the average U.S. family between $400 and $700 per year through increased premiums.
What to do about car insurance fraud
Most states have a bureau that investigates car insurance fraud, which is where possible scams can be reported.
If you think you are being defrauded, go directly to your insurer, because some companies have systems in place to report fraud.
Save on car insurance with Jerry
Because car insurance fraud is prevalent and is causing insurance premiums to increase, another thing you can do is use
Jerryto help you save as much as possible.
Jerry’s free app will save you the hassle of trying to find the most affordable car insurance by comparing quotes from up to 45 different insurance companies for you in under a minute, without any long forms to fill out.
Jerry will send you quotes that compare to your current coverage—and as a licensed broker, it takes care of your insurance needs from start to finish. The app also monitors your car insurance rate every six months on an ongoing basis.