Pre-inspection is “Inspection of the vehicle before acceptance of the risk by an insurance company about the physical condition of the car.” Pre-inspection can alsoe done in case of break in insurance or transfer of interest.
Rising auto insurance rates are a concern for consumers and insurers alike. In, auto insurance fraud accounts for a large part of the rate increases. Two types of auto insurance fraud account for much of the increase. The first involves the vehicle’s owner failing to reveal existing physical damage when applying for insurance. The owner commits a fraudulent act after obtaining coverage by filing a false claim to cover the pre-existing damage. The second involves owners who provide false documentation to insure a vehicle that has been junked or salvaged or that exists in title form only. The owner reports the phantom vehicle stolen and files a claim after law enforcement fails to recover the non-existent vehicle.
This legislation is an effective and cost-efficient way to reduce the impact of insurance fraud on auto insurance rates without imposing an undue burden on consumers, insurers or insurance agents.
This section defines “physical damage coverage” to mean either comprehensive or collision coverage, or both. Insurers would not be allowed to issue a new policy providing this coverage, or to add the coverage to an existing policy, without inspecting the vehicle. Further, the insurer could not add an additional or a replacement vehicle to an existing policy without a pre-insurance inspection.
Standards and content of inspection reports