Automobile Insurance Fraud

Are you familiar with automobile insurance fraud? If not, read on because this is the kind of thing that can really happen to anyone.

Insurance fraud in and of itself is not new. As far back as in time as in Ancient Greece, people used to deliberately sink insured ships in order to cash fraudulent claims. With the advent of the automobile, the problem just shifted to car insurance fraud. Automobile insurance fraud has become a very thorny issue for insurers: it costs the insurance companies money, it costs consumers money (the insurance companies incorporate those fraudulent claims into their cost of doing business), and it makes it harder for insurers to determine whether a claim is legitimate or not, which in turn delays payouts for the legitimate claims.

Automobile Insurance Fraud Techniques

Scams are usually operated through a well-organized crime network that includes scam drivers, scam helpers, insurance brokers, doctors, technicians and lawyers. The most “popular” auto insurance fraud scams are staged automobile accidents. In an attempt to get a way with doing something illegal, the scammers have refined their techniques and as previously mentioned will involve several participants in the scheme.

The most common type of scam is ‘the panic stop‘. This occurs when the car in front of you will slam on the brakes (usually for no apparent reason), causing you to crash into the rear of their car. The driver will then claim on your insurance for the damages to their car and any injuries-whether real or fake- that might have resulted from the accident. In order to pull this off swiftly, what they do is that they have some of the passengers in the car look out the back window for any sign of distraction that involves you taking your eyes off the road. That passenger signals them, and they brake hard. The victim will claim that the car in front of them stopped for no apparent reason but will likely not be able to prove anything since they were really not looking. Meanwhile they will have to pay for the damages and injuries reported by the criminals.

Another technique popularly used is ‘the helpful driver‘. that person will allow you the right of way when attempting to merge into busy traffic, and then purposely collide with you as you speed up. Later, when claiming off your insurance they will deny that they signaled to let you through. A variant of this is the “good Samaritan scam” where one criminal waves you on when you can’t see if traffic is coming. They actually wave you into the path of their partner who rams right into you. From the look of things, you drove out into traffic, and it’s your fault. When the cops arrive, the waver of course denies having waved anyone in.

You might have heard of the “swoop and squat” in Allstate commercials. This scam involves three vehicles. Two are driven by the criminals and the third is driven by the victim. The “squat” vehicle is in front of the victim. The “swoop” vehicle pulls ahead of the squat vehicle and intentionally cuts them off, causing the driver of the squat vehicle to slam on his brakes. Usually, the victim can’t react quickly enough and rams into the squat vehicle. The swoop vehicle that caused the accident has disappeared by then. The victim will report to the police how exactly the accident happened, but because that vehicle can’t be found the victim ends up having to foot the bill for the damage and any personal injury claims.

Then there is what is known as the side swipe. This type of accident usually happens at busy intersections with dual left hand turn lanes. The criminal positions his vehicle in the outer left turn lane. When the victim’s vehicle drifts into the outer turn lane the criminal side swipes him. To make sure the scheme works the criminal does preliminary surveillance to make sure that the intersection is busy enough where drifting will occur because of the amount of traffic.

The Exaggeration Scam – This is the scam in which the scammer has inflicted prior damage to their car to make it look like the damage occurred in their accident with you. They then stage the accident. Since their car was not appraised before the crash, all the damage inflicted on it can be blamed on the accident. The lack of proof make them get the benefit of the doubt and they receive payment for that damage from your insurance company. Sometimes, after an accident, either staged or not, the car insurance scam driver will go to another location and cause extensive damage to their vehicle and claim that the damage happened during the original accident.

Another way automobile insurance scammers get people is with fake helpers who try to scam you by offering to help an innocent driver find a auto repair shop, doctor, or lawyer. Here, everyone is in on the scam process. The body shop charges you enormous rates, the doctor and lawyer also lie to collect more from your car insurance company.

How To Avoid Falling Victim To Automobile Insurance Fraud

Anybody could fall victim to such scams such scams. However, these probability of these incidents happening to you can be reduced with a bit of awareness and by following basic precautionary measures. Some useful safety measures include careful observation of surroundings, abiding by the law while driving, ensuring ample distance in front of the vehicle, concentrating while driving, recording every minute detail at the site of accident and taking pictures using a disposable camera.

After a collision, make sure you pay attention to the driver and whether or not he/she looks injured; also check if there there are any other passengers in the car. There have been cases where the scammer will claim there was another person in the car that was injured, when in reality that person never existed. If someone is injured, make sure you call the police or emergency services, that way you can have a formal report of the extent of their injuries; that will stop them from having the chance to exaggerate their claims. Also, take photos of any damages made to their car. These photos might come in handy if the fraudster takes the car to a different location and damages it further in order to claim more money.

Drive safe and smart and your chances of being the victim of auto insurance fraud will be greatly diminished.