Most things that will make you pay less or attract very very cheap auto insurance rates have to do with you as a person. However, there are a few things that really have nothing to do with you but with the industry as a whole. There are many of them like customer acquisition costs, cost of running an office, staff payments and benefits and so on. However, we’ll talk about one that most of us don’t even know eventually affects our rates: Insurance fraud.
It might be hard for most of us to believe that it is us, the end users, that actually pay for insurance fraud. How is this so? When folks defraud insurance carriers, it adds to their overall costs of doing business. They add it to what they have to spend to stay in business.
And, don’t forget that your premium is simply the cost to an insurer for covering your risks, handling administrative cost and staying profitable. So who pays for fraud committed against them? Their policyholders. Therefore, you can no longer take a passive stance to these fraudsters.
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