What is double-dipping an auto insurance claim?

Double-dipping an auto insurance claim is illegal. Having multiple companies payout for the same claim is fraud and can land you in jail or cost you in fines.

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Rachel Bodine graduated from college with a BA in English. She works as an associate editor and writer for 4autoinsurancequote.com for over a year and enjoys creating content that offers expert advice on car insurance topics.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs...

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Reviewed byLeslie Kasperowicz
Former Farmers Insurance CSRhttps://res.cloudinary.com/quotellc/image/upload/insurance-site-images/4autoins-live/6ea5d860-leslie-kasperowicz.jpg

UPDATED: May 12, 2020

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Here's what you need to know...

  • Double-dipping insurance means submitting the same claim to multiple companies
  • Double-dipping auto insurance is illegal
  • If you double-dip, you can be sued for fraud

Double-dipping at a party is not cool, but it won’t land you in jail. Double-dipping insurance claims just might.

What is double dipping a car insurance claim? When an accident happens, you want all of the money you are entitled to for damages and injuries. That only becomes a problem if you submit the same claim to multiple companies. We’re going to explain exactly why double-dipping auto insurance claims can land you in hot water and how to avoid it.

First, though, you will want to make sure you have all of the coverage you need, at the cheapest rates. Use our free tool to get multiple quotes to compare.

Double Dipping Car Insurance Claim

It is uncommon for double-dipping to be accidental. In the vast majority of cases, this is premeditated fraud and the culprits are fully aware of what they are doing at the time.

What does double dipping mean?

The simple legal definition of insurance double-dipping is fraudulently submitting a claim multiple times. Double-dipping in the context of auto insurance, essentially means that an insurance claim is filed with two different insurance companies.

This allows you to double claim insurance payouts. Although the benefits of double insurance would be big payouts, it is against the law.

What is auto insurance fraud and how does it affects premiums?

Auto Insurance fraud ranges from lying on claims reports to intentionally staging accidents and filing false theft reports. It is estimated that it costs the average family between $400 and $700 a year.

This, of course, raises rates so that insurance companies can offset the amount they payout in claims.

Your rates will also be affected by an auto accident on your driving record. This table shows you just how much of a difference one accident can make.

Average Annual Rates Based on Driving Record
CompanyRates with a Clean RecordRates with 1 Accident
Allstate$3,819.90$4,987.68
American Family$2,693.61$3,722.75
Farmers$3,460.60$4,518.73
GEICO$2,145.96$3,192.77
Liberty Mutual$4,774.30$6,204.78
Nationwide$2,746.18$3,396.95
Progressive$3,393.09$4,777.04
State Farm$2,821.18$3,396.01
Travelers$3,447.69$4,289.74
USAA$1,933.68$2,516.24
Get Your Rates Quote Now

You can see that just one accident can cost you around a thousand dollars a year on your auto insurance.

What is double-dipping in insurance?

An example of this might be if you take out auto liability insurance to protect yourself from having to pay for any accidents and also take out health insurance.

In this case, you can find yourself getting a pay-out both from your car insurance company and from the health insurance company. You would be double-dipping health insurance as well as auto insurance.

Medical insurance double-dipping might also happen if you carry MedPay or personal injury protection (PIP) coveage. Both pay medical claims through your auto insurance.

Double-dipping MedPay and car insurance can be fraudulent, just like PIP double-dipping with health insurance if you are asking the same claim to be paid twice. Double-dipping dental insurance and medical or auto insurance would also be a problem for the same reason.

And this would be frowned upon, seeing as both insurers would payout to cover legal costs and in this scenario, the claimant would then be paid twice for the same thing.

Your double-dipping health insurance claim would be denied. Double-dipping medical insurance can also lead to legal trouble.

Likewise, an example of double-dipping might be if you took out comprehensive insurance for your belongings, and then got your laptop separately insured against theft.

Then, if your laptop was stolen, you could claim on both the contents insurance and the insurance you had on the laptop because you had duplicate insurance coverage.

The same is true if you use your homeowner’s policy to insure your laptop then double-dip home insurance claim too. Or if you purchase travel insurance and file against that as well as your auto policy. Filing with your auto policy while double-dipping travel insurance is also illegal.

It is best to just have the coverage you need and avoid overlapping coverages. This video explains some of the types of auto coverage available to you.

It is important to speak with your agent about your auto insurance needs to avoid overlapping coverage and double-dipping.

Double-Dipping Insurance Claim

The term tends to refer specifically to when victims will file claims against the at-fault driver’s insurance company and file a duplicate claim for their own insurance. In this case, it can also be referred to as ‘double-dipping’.

Is double-dipping illegal?

No double-dipping is allowed with an insurance and it is against the law. However, it is particularly common to find in the auto insurance industry.

Not surprisingly, there is a law against car accident insurance double-dipping. Not to mention, double-dipping and the insurance ethic code do not mix.

Can a vehicle be insured twice?

It’s also possible in some cases for double-dipping to refer to claims being taken out on two different insurance policies held by the same person.

For instance, if you had insurance with two separate auto insurers, then this might allow you to claim on both using the double insurance coverage for your car. The double-dipping car insurance claims would be fraudulent.

More commonly, it might be that you are insured to drive multiple cars and another person has added you to their insurance premium. The double-dipping insurance driver and owner of the vehicle would be held responsible for the fraud.

In all these scenarios, the money that is paid out will be double what you would normally receive. This means that you would likely make a profit and receive much more than the costs associated with the accident.

Some particularly unscrupulous individuals might even use this strategy in conjunction with other types of fraud. For instance, you might double dip and then purposefully get into an accident in order to claim on multiple insurance policies.

Some people might even take out more than two insurance policies – effectively triple-dipping or worse.

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What Happens if You Get Caught?

Of course, there is a chance that insurance companies won’t find out. However, as insurers will often work directly with garages and other organizations, there is a high chance that your fraud will be discovered.

What do auto insurance companies do when they suspect a customer of fraud?

This will be treated as fraud legally, and that means you might find yourself on the receiving end of significant fines. You could even be sued by the insurance companies.

This video explains what auto insurance companies watch for.

More likely, you will find that the insurance companies deny the car insurance claim on the basis of it being a fraud This will then leave you without any type of legal assistance. You may then find yourself having to pay for repairs to your vehicle or for medical costs on your own.

How serious is an insurance auto fraud claim?

If you get caught double-dipping, then you are violating the law and will likely face stern consequences as a result. The insurance fraud double-dipping law punishment can be severe depending on the type of fraud and amount of the claim.

How to Avoid Auto Insurance Fraud

In some rare cases, you might find yourself unsure as to whether you should be claiming through more than one type of insurance.

Perhaps you want to use one policy for one aspect of your accident and another for another? Maybe your health insurance is better than the health coverage provided by your car insurance?

In these cases, it is important to ensure that you claim with each company only for the amount you need. Meanwhile, if you are ever uncertain, then it always pays to thoroughly examine your policy. If you’re still unsure, pick up the phone and discuss it with your insurance providers.

At the end of the day, the best strategy is always to be fully transparent and to ask when you’re unsure. The advisor you speak to is paid by the insurance company to provide you with assistance and they gain nothing by recommending you one way or the other – they should give you the best advice possible.

And for the most part, avoid taking out more than one policy with overlapping coverage. You should normally be able to find single policies to take care of everything you need, which will be much simpler.

Now that you know what to beware of, you can look at coverages that fit your needs. Enter your zip to get multiple quotes immediately to compare rates.

Frequently Asked Questions

Here are a few more questions that get asked often about double-dipping insurance.

What do I do if insurance paid me twice?

Contact your insurance company immediately and let them know. Transparency is key to make sure your insurance company knows that you are not doing anything fraudulent.

How are Missouri double-dip insurance issues handled differently?

In Missouri, you can double dip your personal health insurance and Medical Payment insurance, if you have them both and are injured in an accident. Make sure you speak with both companies in advance to make sure you are following the law.

Is double-dipping insurance in Texas allowed?

Just like most other states Texas does not allow double-dipping on insurance. However, the Texas law provides an automatic $2,500 personal injury protection coverage for every driver. This can be used in conjunction with health insurance or auto insurance, as long as the same claim isn’t filed twice.

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