There are two distinct types of insurance fraud, and each one carries different penalties and consequences ranging from higher insurance rates to serving time in jail. In both situations, the best rule of thumb is to avoid making false claims and to never file a claim that was contrived or imaginary.
The first type of insurance fraud is called soft fraud and usually involves a person filing a legitimate claim but asking for more money in damages than are actually due. This could be something as simple as telling the insurance adjuster that existing damage was caused by a new accident, or informing the insurance company you are suffering from worse injuries than you actually are.
The second type, hard fraud, is far more serious and could result in criminal prosecution. This type of fraud includes staging an accident in order to have a claim, reporting a vehicle stolen that was never missing, or deliberately crashing your car just to get the settlement.
If you are caught defrauding the insurance company, the least of your worries are higher insurance rates. The insurance company may drop you as well, and that would mean paying higher rates at any other company based on your insurance history. On the more serious end of the spectrum, insurance fraud can be punished to the maximum extent of the law, resulting in many years in jail and having to pay back the money from the claim.
If you have been dropped for insurance fraud, you can use online insurance quotes to find new coverage. Remember, as long as you are legally entitled to drive you will be able to purchase insurance, even though it may be at significantly higher prices. If you are having trouble finding a new insurance carrier, shopping online may be the easiest way to get out of your current dilemma.