When a citizen makes a false insurance claim after a car accident, or fabricates a claim altogether, insurance premiums have the potential to increase.

InsuranceStep reported false insurance claim arrests in 2011 were up by 8 percent from 2010 in Virginia. Due to the 91 arrests stemming from insurance fraud charges, 2011 was the third consecutive year that fraud cases increased, the source noted.

Experts at InsuranceStep note that the New Jersey Department of Banking said statewide premiums have had to increase by 25 percent in recent years because of fraud, detailing that for every dollar collected by insurance agents, $1.25 is paid out.

The Virginia State Police Department created the Insurance Fraud Program in 1999 to address the growing problem that insurance companies face. They train law enforcement to conduct inquiries into fraudulent claims and encourage citizens to come forward with tips, offering rewards of up to $25,000.