Is it true that auto insurance agents sometimes commit insurance fraud?

Melissa

Albuquerque, NM

Yes there are numerous cases of faulty insurance claims committed by auto insurance agents. They typically connive with other professionals you would hardly suspect. The most common people are doctors and lawyers who work with auto insurance agents and make up a story about some car accident. Then they file a claim against the targeted auto insurance company. They provide a legitimate look to their claim by furnishing paperwork that has signatures of various individuals who are purportedly witnesses. They usually file a claim that does not exceed one thousand dollars. Auto insurance companies rarely bother to investigate a claim of such an amount. So, if there are auto insurance agents who solicit for your support by letting you sign questionable documents, then you might just have been an unwitting accessory to a crime. It is also advisable not to pay in cash when negotiating with auto insurance agents. It is always safer to use checks or money order. While driving, you should also be alert for orchestrated accidents. The most common is the rear-end accident where a driver in front of you suddenly slams on the brakes, thus causing you to hit the car from behind. Defensive and safe driving coupled with a little vigilance will help you avoid such pitfalls. Insurance fraud is gradually getting widespread, and you do not want to be hooked into such a bad situation.

My automobile insurance agent keeps selling me all sorts of coverage. He is so persistent that he’s starting to get on my nerves. Besides, he uses so many terms I don’t get at all. Now, I don’t know which part of his talk I should believe in and whether or not I should get more coverage than the state requires. Can you explain to me the types of automobile insurance coverage in New Jersey?

Cary

Jersey City, NJ

Well, there are state requirements, and there are add-ons. I, by the way, know how you feel about those agents. But what can I say? We’d probably do the same if we had the same job. Here is (I hope) a simplified version of their sales pitch. The State of New Jersey requires Bodily Injury Liability, so that if you inadvertently hurt another person on the road, you can take responsibility. The limit is $15,000 for that injured person and $30,000 for each accident. Property Damage Liability has a minimum of I think $5,000. An automobile insurance agent would refer to this as 15/30/5. What they call UM or uninsured motorist coverage is for your protection against those who are so irresponsible as to drive without proper automobile insurance. The limits for UM Bodily Injury and Property Damage are $15,000 and $30,000 respectively. Personal Injury Protection, as the term suggests, will save you from having to pay exorbitant medical bills for injuries you sustain in an accident. This is not a state requirement, but it is most helpful as far as I’m concerned. Certainly, it won’t cover everything (the automobile insurance company will decide how much is reasonable), but it will bring down the costs. You can also get medical services from the health care providers they have already approved. It would end up being cheaper. This is the standard coverage, Cary. Now go shopping!