Homeowner Insurance Fraud

Homeowner insurance fraud is a growing problem in the United States and one that you should learn about before purchasing a new policy or using your existing plan. Fraud is an issue that costs both the consumer and the industry money, and every year millions of dollars are lost due to fraudulent claims. In this article, we will go over a brief explanation of homeowner insurance fraud, and some things that you can do to avoid it. Also, we will outline some of the ways that you can locate the best possible providers online, and get the kinds of coverage provisions that you are looking for in your house.

Purchasing a home is a big decision that often takes years of preparation and saving. When you finally choose a piece of property, you will likely spend many more years paying mortgages and other expenses. These kinds of financial pressures should be planned for, and it is important that you think about all of your costs before purchasing real estate. However, some expenses can be very unpredictable, and that is why we have homeowner insurance. If a hazard like fire or flood damages your property, your flood or fire coverage policy is there to help you pay for the damages. This kind of protection is key to ensuring the financial safety of your property.

There are some people that will try to manipulate the homeowner insurance industry. There are legal ways to manipulate your options and find the cheap premiums and affordable quotes that you are looking for, but certain owners will use fraud in order to get money that they do not deserve. This kind of practice is not only dishonest, but it hurts the overall industry and caused the rates of the other customers to go up. The following is a basic explanation of some of the types of homeowner insurance fraud, and what you can do to avoid running into problems.

Homeowner Insurance Fraud Explained

When you submit a claim on your homeowner insurance policy, the provider will be responsible to do a bit of investigation in order to examine the veracity of your claim. These investigations generally involve an adjuster and any evidence that you can provide. Most providers will want to see pictures, receipts and other documentation before they provide you with a payout. When committing fraud, many of these types of evidence are forged.

In order to understand homeowner insurance fraud, we will create a quick example. Lets imagine that an owner is having a difficult time paying their mortgage and making ends meet. On their policy provisions, they notice that their insurer will pay replacement cost coverage for fire damage, and they will also cover mortgage payments and additional living expenses. Therefore, our owner stages a fire in their own home in order to collect on the policy. After the fire is put out, the owner takes pictures and documentation of the damage and sends them to the insurer in order to get their claim. It will be difficult for the provider to determine if homeowner insurance fraud is being committed, and the policyholder will typically get their payout. This is just an example of a type of fraud that is done every year and is costing both companies and customers millions of dollars.

There are strict penalties for people that are caught committing homeowner insurance fraud including very large fines and potential jail time. In order to avoid unintentional fraud, you should make sure to learn about the provisions of your policy before submitting a claim. Also, make sure to purchase your coverage from companies that are going to have the best processes for avoiding fraud, as these companies will typically be able to give their honest customers much lower rates on their homeowner insurance policies.

Comparing Homeowner Insurance Options

In order to locate the best insurers online, take the time to make some simple comparisons. These comparisons will help you locate the companies that can give the best kind of customer service and the lowest discount premiums. Within minutes, a customer can compare dozens of options and find the providers that have the best track records and most affordable options. With a bit of more intensive research, you can also locate the carriers that have managed to control homeowner insurance fraud within their own companies.

While homeowner insurance fraud is a big problem, there are things that the average owner can do to control it. Make sure to only submit honest claims on your policy and report any individuals that you think may be attempting fraudulent claims. Also, look for the providers that are doing their best to control their losses, as these homeowner insurance companies will be able to give you the kind of rates and coverage that you need for your real estate.

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