Rates on the Rise

Since 2007, the costs of coverage have been on the rise all over the country. The price of a policy has gone up tens of percentage points at a time, even while the economy falters. No one is quite sure why exactly, but we do know the impact: millions of uninsured drivers and millions more underinsured.

One of the popular theories is that the greater mass of the population is aging. As the baby-boomers become elderly, they fall into that higher risk category of drivers. The 65 and older market is right there with teenagers as the most accident-prone group of drivers.

Recently, other causes have begun to emerge. There is still an economic link.

Theft, Thrift, or Fraud?

When economic times are tough, the people who study these things in the government and insurance sector inevitably report increased rates in auto crime. Theft always shoots right up.

In 2010, the National Insurance Crime Bureau (NICB) has turned the screw a bit strangely. It's not necessary car theft that is more common - it may just be the claims.

The amount of fraudulent theft claims has gone through the roof. Adjusted, the numbers show that car thefts have actually declined by 17% since 2009.

So how does this work?

It is something called "owner give-up". An owner give-up is when the owner of an insured vehicle makes it appear like the vehicle has just disappeared or been stolen.

In the most extreme form, the owner might leave the car in a dangerous, high crime neighborhood, hoping it will be stolen.

More commonly, however, they simply dump the car somewhere it cannot be found. Some time after the claim is made, the vehicle is often discovered in a river, ditch, volcano, and so forth.

Organized Crime

This kind of insurance fraud is taken to the extreme by some who are a part of crime organizations.

Often, a person will purchase a vehicle and then load it onto a boat where smugglers take the vehicle overseas. Next, they file a theft claim, knowing that the car will never turn up. They get their money from the purchase back as well as whatever the smugglers paid them for the vehicle.

In other cases, after buying the car, they simply hide it in a garage for a month, collect their claim, and sell off the vehicle on the black market.

The Impact of Fraud on your Auto Insurance

Decent people end up paying for this fraud with increases in their premiums. Why? Because:

1. The risk of theft seems much higher

2. Insurance companies want to make back the money they lost to fraud

These rate hikes end up costing you hundreds of dollars a year.

Unless you're a detective, you're not going to stop these criminals. Still, there is a way to avoid paying hugely inflated fees.

How to Beat the Auto Insurance Rate Hikes

1. Drive a vehicle that is rarely stolen

2. Park the car in a covered garage, not on the street

3. Use auto insurance quotes

Auto insurance quotes are the best way to save on car insurance for your existing vehicle. If you want to find the lowest rate possible, compare auto insurance quotes online.