Just about anything in car insurance claims is prone to fraud.
Having handled car insurance cases for a number of years, I just get amused sometimes of the ingenuity of these defrauders in making car insurance claims.
It is not unusual that car repair shops are in cahoots with the policyholders themselves.
Worse, some may be in cahoots with crooks in the Land Transportation Office.
First, we need to discuss briefly the nature of the car insurance business
A car owner will have to insure his unit with a non-life insurance company.
This is to protect him, in the event of an unknown peril. If a car owner meets an accident, if his car is covered by insurance, then the insurance company will indemnify the owner, meaning the insurance company will pay the costs of repairing the car and restoring it to its condition previous to the accident.
In this simple example, it would be called “own-damage” claim.
Third party damage: A car owner will also insure his unit against third party property damage.
In other words, if a car will cause damage to somebody else’s property, naturally, he will have to pay the owner of the damaged property.
If the car is insured against third party property damage, the insurance company will shoulder the costs
There is also an insurance against third party injury.
If a car owner will meet an accident and causes injury to a third party, like bumping a pedestrian, then some form of payment will have to be given to the injured third party.
If the car is insured against third party injury, then the insurance company will indemnify for the damaged caused upon the third party.
What usually happens is that a car owned will just procure a “comprehensive” insurance on his car or vehicle.
In such case, he is covered by insurance for all the above perils, plus coverage against theft.
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