When sharing a bowl of dip and some chips with friends, double dipping is considered an unsociable act and one that is frowned upon. This is when a member of the group takes their chip, dips it, bites off the end and then dips again. What they have now done is effectively to transfer their saliva from their mouth, to the chip, and into the sauce.
The next person who dips is now going to be consuming a little bit of their saliva when they do. Not cool!
When referring to insurance, however, double dipping means something quite different. It’s still frowned upon though and it can actually get you into even more trouble. Read on to learn more…
What is Double Dipping?
Double dipping in the context of auto insurance, essentially means that a claim is filed with two different insurance companies. 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. And this would be frowned upon, seeing as both insurers would pay out to cover legal costs and in this scenario, the claimant would then be paid twice for the same thing.
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.
You could, but you would be breaking the law to do so!
Double Dipping in Auto Insurance
Double dipping is against the law regardless of the type of insurance that you have taken out. However, it is particularly common to find in the auto insurance industry.
Here, 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 sipping’.
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.
More commonly, it might be that you are insured to drive multiple cars and another person has added you to their insurance premium.
In all these scenarios, the money that is paid out will be double what you would normally receive. This means that the claimant will likely be in profit and will 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.
What Happens if You Get Caught?
If you get caught double dipping, then you are violating the law and will likely face stern consequences as a result.
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.
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.
More likely, you will find that the insurance companies contest the claim on the basis of it being fraud and 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 to Avoid Double Dipping
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. However, 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 the contract that came with 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.