Auto insurance isn’t a pretty business. As with any multi-billion dollar industry, there are some seedy aspects to it that many of us would rather not think about. Among these is fraud. Auto insurance fraud is all too pervasive in the business and more people get away with it than you might think.

One of the most common types of car insurance fraud involves what are known as “staged accidents.” A couple people involved in the fraud might intentionally cause a collision that would allow one or both of the people to collect a payout from their respective companies. Sometimes a driver or passenger will fake a medical condition after a collision. They might say that they suffer from whiplash because of the accident, or some other injury that can net big bucks in a lawsuit. Some people even will have an accident and then say that somebody else struck their car and drove off.

But it gets even worse. Some people who want to collect the total payoff of a totaled car might even set their car on fire. But for the most part insurance fraud consists of what auto insurance providers call “soft fraud.” This consists of smaller, harder to prove fraudulent causes. Someone might, say, fill out a claim and say that certain damage that was there before happened because of the crash. Some mechanics will be involved in a ring of fraud where they help the client fudge the numbers on the repairs so that both parties will receive some extra money.

But for the most part, regular folks like you and me are above such criminal activity. Unfortunately, we still suffer for other people’s fraudulent activity. It is estimated that car insurance fraud is one of the reasons that premiums for insurance are so high. Since big companies get bilked out of millions each year from fraudulent claims, everybody has to pay a higher premium. So what can we do about it?

Sadly, the answer is “not much.” Until there are better ways of detecting fraud, we will all have to pay a bit more for auto insurance than we should. But you can be vigilant about fraud and report it if you see it. That’s one way to help alleviate the yearly costs of fraud. You can also form a watchdog group that will provide even more surveillance of fraudulent activities. Who knows? Maybe someday we will all pay more comfortable premiums and auto insurance fraud will be a much smaller part of our world.