It seems simple enough: if you can no longer afford your car loan payments, just report your car stolen and then torch it in the wilderness. On the other hand, maybe you have been in an accident, and you just exaggerated the extent of your injuries to your doctor and to your car insurance company. Alternatively, maybe you were text-ing and driving then went off the road, but claimed it as a “hit and run.”
Do not do it. Do not fall for the lure of car insurance fraud. First of all, it is illegal: depending on the state you live in, you can land some serious fines or even end up spending years in jail. Prison is not worth a few extra dollars!
Currently the most common type of fraud is “car owner give-up.” This is when policyholders find themselves upside down in their car loan (meaning the car is worth less than the loan, and they can no longer afford to make the car loan 
payments), so they simply abandon their car somewhere and report it stolen. Sometimes they will set the car on fire: Las Vegas police report that over seventy cars have been torched and abandoned by their owners just on one stretch of road in the last year. Sadly, most of these torch jobs were caught on video (after all, there are few urban areas not covered by video cameras today) and the owners arrested for fraud.
Generally, there are two major types of car insurance fraud. “Hard” fraud cases include things such as staged accidents and intentional collisions, false injury claims (including adding in passengers that were not actually in the car at the time of the accident and claiming they are also injured), and claiming a single car incident as a “hit and run.” The other type of car insurance fraud is “Soft,” such as adding past damage to a car and claiming it to be related to a recent accident, or convincing your auto body repair shop to pad the claim, or convincing your doctor to provide unneeded medical treatments to collect fees for treatment.
However, car insurance companies are experts at spotting fraud, and they have a veritable arsenal of investigators working with them. These investigators work with the police so that you will lose your claim; you face handcuffs and a jail cell because the police do not approve of car insurance fraud. In Georgia, you can face up to ten years in prison for car insurance fraud. In New Jersey, you can face up to 15 years in prison. If serious injury to others or even a death occurs, you can end up with life in prison.
Clearly, car insurance fraud is not worth it. Be smart when you file you car insurance claims; be honest and clear, avoid admitting fault, and keep accurate records. Do not inflate your damages. The price you pay for car insurance fraud is far too high to make it worthwhile. Instead of committing fraud, use CarInsuranceQuote.com to get multiple car insurance quotes and find the best price for your policy, and get extra cash that way. It is much smarter – and it is legal.