• Auto insurance fraud means higher rates for honest drivers.car image by maxuser from Fotolia.com
  
  As of 2010, 48 of the 50 United States require vehicle owners to have auto insurance. The only two states not requiring auto insurance are New Hampshire and Wisconsin, however, they do require financial responsibility should an accident occur. Many factors can affect the cost of auto insurance, such as age, driving record, gender, credit rating and even the make of car. There are many types of auto insurance fraud causing honest motorists to pay more for their insurance.
  
  

Staged Auto Accidents

• One of the most common acts of auto insurance fraud is a staged accident. These occur in many ways. One is the swoop and squat, which involves three vehicles, with a victim and two criminals. One criminal cuts off the other, causing the victim to rear-end the car in front. Sideswiping is another common incident where the criminal waits for the victim to get in position, usually in a turn lane, then sideswipes her. Usually the victim's insurance must pay for any damages to the criminal's car. Another type of fraud accident is a "panic stop." In this case, the criminal places his car in front of the victim's car; usually having a passenger watching for the victim to take her eyes off the road for a second. Once the victim looks to change a radio station or has some other distraction, the criminal will slam on his brakes, causing the victim to rear end his car filled with many passengers; all claiming bodily injury.
  
  

Auto Repair Shop Fraud

• Sometimes, an auto repair shops is part of an auto insurance fraud ring. This happens when the shop claims to have repaired body damages that did not occur. Another instance is when the auto repair shop falsely claims to have replaced or fixed broken parts. Duped by this practice, many insurance companies now demand receipts for insured car repairs.
  
  

Car Theft

• Vehicle theft also plays a role in auto insurance fraud. This occurs when a person knowingly leaves keys in the car for a friend or associate to "steal." Often, those involved will disguise the vehicle by changing its appearance and moving it to another state. Thus, the insurance company pays for a stolen car not really stolen. Many insurance companies now stipulate that if the driver leaves keys in the vehicle, they will not cover theft.