What Is Double Dipping Insurance? Don’t Get Caught in Insurance Fraud

There are so many different types of insurance that it’s easy to get confused. For cars alone, there is liability insurance, collision, and comprehensive insurance. You have to be careful, though, that you don’t end up double dipping. You could get caught in insurance fraud.

In this article, we’ll explain what double dipping insurance is and talk about other things that car insurance companies consider fraud. We’ll even take a look at how to avoid the negative legal and insurance consequences of fraud and double dipping.

What is double dipping insurance?

When it comes to car insurance companies, double dipping insurance means filing a claim multiple times to multiple companies. An example of this would be if you got into an accident and filed claims to two different insurance companies — one for your car and one for medical bills. 

Double dipping can have some serious negative effects. For one, the insurance company can cancel your policy for breaching its contract. Two, it can take you to court and demand repayment. You could also have some hefty fines or jail time if you do this.

Filing a claim with two different companies might seem like a logical thing to do, but it is strongly recommended that you stick to filing one claim with only one insurance company. You will save money and time in the long run. 

What other things are considered car insurance fraud?

Lying of any kind is considered fraud to car insurance companies. It is definitely not okay to do when filing a claim or creating your policy. Even a little white lie can lead to some serious consequences – as stated above.

Each state has different consequences for fraud. If you live in Florida, insurance fraud is taken very seriously. You can spend up to 30 years in prison, depending on the severity of your crime.

Lying can have a lasting effect on those that have been impacted by it. It has the power to ruin marriages, friendships, and careers. It has many different forms not only to people, but to insurance companies as well. 

What are the different types of car insurance fraud?

There are two types of lying that can be done to an insurance company. One is called hard fraud, the other is soft fraud. An example of hard fraud would be staging an accident or claiming that your car has been stolen when you had someone take it. An example of soft fraud would be refusing to add drivers to your policy who drive the car that you do.

The hard fraud listed above is considered to be criminal solicitation. In the state of Florida, criminal solicitation is not taken lightly. Time served ranges from a year to thirty years.

Some other examples of fraud would be registering your car in a different state or county than where you live and having a mechanic do repairs that were not needed and then charging the insurance company for them.

These different types of fraud are all heinous crimes and should have serious consequences to them. No one is above the law. If you want to avoid the negative consequences of fraud, then keep reading.

How to Avoid the Negative Consequences of Fraud

To review, the legal and insurance consequences of fraud and double dipping include being sued, fines, probation, or worse. The easiest way to avoid these repercussions is to be honest. This may seem obvious, but not many people know how to do this. If you don’t want to have to go to court, do community service, or serve time, then tell the truth.

Even if that means you lose out on financial prospects, it’s better to be truthful than to commit a felony. Committing fraud can cost you more than just money. 

Times are hard, especially now with this pandemic. Money is tight and jobs are few, but do not engage in insurance fraud. It will dampen your reputation and if you have a job, it could very well end that too. 

Fraud and double dipping are dangerous and risky businesses. Courts won’t back you up if you file a complaint when you’ve committed fraudulent activity. Be smart about filing claims and dealing with insurance. It will save you from so much heartache.

Below are some frequently asked questions that people have about insurance fraud and double dipping. Some of these answers will be reviews of what we’ve discussed in this article.

Frequently Asked Questions

What is double dipping insurance?
Double dipping insurance means filing a claim multiple times to multiple companies.

Why is double dipping insurance illegal?
When double dipping occurs, overpayment can happen and that can be construed as theft to the insurance company. Also, when someone does this, they are in breach of their contract with their insurance company’s policies.

What can be done to avoid double dipping?
File one claim using only one insurance company.

What are the consequences of double dipping?  
The insurance company can cancel your policy for breaching its contract, the insurance company can take you to court and demand repayment, and you could also have some hefty fines or jail time.

What is fraud?
Fraud is lying. When someone does not tell the truth, they are committing fraud.

What is an example of fraud when it comes to insurance?
Examples of fraud include filing a false claim, registering your car in a different county or state, or criminal solicitation.

What are the two types of fraud?
Hard fraud and soft fraud are the two types of fraud.

What’s the difference between hard fraud and soft fraud?
Hard fraud is more severe and untrue than soft fraud. Soft fraud is more like white lies than blatant lies.

What are the consequences of fraud?
Being taken to court, getting arrested, being charged fines, or being charged with community service.

How do I avoid the negative outcomes of fraud?
Be honest and truthful when filing a claim or filling out your policy information.

Peyton Leonard writes and researches for the auto insurance site, 4AutoInsuranceQuote.com. She is passionate about warning her readers to avoid insurance fraud and prevent falling victim to it.

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