Let’s say you get into a car accident that requires you to go to the hospital. You know you are fully covered by your comprehensive National City auto insurance policy, so you file a claim to get your car fixed, pay for the hospital bills, and cover damages you have caused to others. You wonder whether you can get cash from the insurance company covering the other driver, and thus you file a claim against that policy as well. This is called double dipping, and it is illegal to do so in California and all other states.
Understanding Double Dipping
On a daily basis, the insurance industry must deal with risk, fraud, and drastic shifts in the financial market, but there is one more issue that causes a substantial amount of concern among underwriters and insurance company executives.
Double dipping, the practice of making the same claim with more than one insurer, is a problem more formally known as duplicate coverage. In some cases, double dipping is carried out maliciously. In other cases, a person who purchases multiple insurance policies may not be aware he or she can only submit a claim for a specific loss against a single policy.
The Legality of Double Dipping
When searching for National City auto insurance quotes, agents will often ask about other policies you currently pay for. This is part of a strategy to warn you against accidental double dipping, which is considered a fraudulent act that could lead to criminal charges in certain circumstances.
There is nothing to prevent you from purchasing coverage from various insurers. You can have multiple policies at once, but you cannot submit a claim for the same loss on more than one policy. If you review the provisions listed in your auto insurance policy, you will find a section that outlines what happens when you have additional coverage provided by other policies and by other companies.
Managing Multiple Insurance Policies
It is important to note you can file claims on separate policies related to the same accident without double dipping. For example, if you need physical therapy after an accident and your auto insurance policy does not cover it, you may be able to file a claim through your medical insurance policy. However, if your auto insurer already paid for emergency care, you cannot submit a claim for it through any other policy you have.
What’s the Worst That Could Happen?
Insurance companies can check for double dipping through an electronic claims network as well as through the process of subrogation, which involves due diligence after claims are paid. If you received a payout from an insurance company other than your own, you should let your insurer know when you file a claim. The agent will tell you if your claim is valid. If you accidentally engaged in double dipping, you will be required to return one of the payouts. If your intent is deemed to have been fraudulent or in bad faith, all your claims may be rejected or voided. In the most egregious cases, prosecutors may be notified.
To learn more about double dipping and how to avoid it, get in touch with the insurance experts at American Tri-Star. In addition to auto insurance, we also offer health, homeowners, RV, and cheap motorcycle insurance in National City. To speak with one of our friendly and knowledgeable agents and to receive a free quote, call 619-474-3900 today.