What is Double Dipping in Auto Insurance, Double Dipping in Insurance Claim

In the event of an accident, when an insured person claims the losses from his own insurance company and also collects the damages from the other person involved, this act is known as ‘Double Dipping”. A study on auto insurance claims reveals that 1.07% of all recognized insurance claims involve double dipping by the insured knowingly or otherwise.

Normally, when you are injured in an accident, your medical insurance company will pay your claims and then recover the amount from the insurance company of the other person involved who caused the accident. This procedure is known as subrogation which is widely used as a standard practice in the US. But according to US law, you are not entitled to double benefits from your insurance to protect against loss due to expenses on injuries. Your attorney would be able to advise you about your options in such as situation.

The normal practice of all medical insurance companies is to cover the client’s cost of medical expenses on injuries resulting from an auto accident. Your medical insurance company will get the necessary documents signed by you and make the payment for the treatment of your injuries. Later on they will recover the amount from your auto insurance company. This process is known as subrogation. When your auto insurance company pays you the claim and then recovers it from the at-fault driver. This process is also called subrogation. But if you go after the other driver who caused the accident and collect the costs you suffered, after having got your own auto insurance claim you are double dipping. Due to the delays in the follow up of these processes by insurance companies some people take advantage of the delays and indulge in double dipping. Normally your auto insurance company will get your signature on the policy agreement with a clause that says that the insurer can recover any claim they paid you from the other driver’s insurer who caused the accident. So you have given the right of getting the amount reimbursed by your insurer from the other party who is at fault. You are not entitled to collect your losses from the other driver in this case. Your insurance company will step into your shoes and make a claim from the other driver’s insurer.

Auto insurance companies try to put in place systems that would prevent the insured from double dipping as it is on the rise in the recent times.