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What You Should Know About Car Insurance Fraud

Car insurance fraud is becoming more common, and it’s everyday consumers who are paying the price. You owe it to yourself to learn which types of car insurance fraud are common, how to spot them proactively, and what to do if you suspect fraud is taking place.

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The Main Types of Car Insurance Fraud

One of the most common types of car insurance is a staged car collision, which is increasing in frequency. Staged car collisions occur when a fraudster intentionally plans a scenario that results in an accident that can be attributed to the fault of another driver. There are four main types of staged car collisions:

  1. The swoop and squat. The swoop and squat happens when a vehicle swerves in front of you, then brakes hard or unexpectedly. Even with adequate reflexes, you may not be able to stop in time, resulting in a rear-end collision. Since most rear-end collisions are determined to be the fault of the rear-ending driver, the fraudster can try to make a large claim against their insurance policy.
  2. The drive down. The drive down relies on a hand gesture—and a trusting driver to believe it. During this scheme, a dishonest driver will wave a car forward, then crash into that car, later denying that they gave a physical signal. Since it’s hard to prove or disprove a hand gesture, the driver who got signaled is usually found to be at fault. This type of scheme also unfolds in parking lots, with drivers backing out while following a gesture.
  3. The sideswipe. The sideswipe is a little easier to avoid. This deliberate crash happens when a fraudster rams your car if you drift even slightly into their lane during a turn. As long as you stay squarely in your lane, you should be adequately shielded from liability here.
  4. The shady helper. Shady helpers may step into a legitimate, accidental crash or a staged, premeditated one. They typically insist that you seek medical treatment at a specific clinic, or repairs at a specific shop, often setting you up for fraudulent services in order to make some extra money on the side.

There are other types of fraud, such as being scammed by an unscrupulous agent, or having a dishonest mechanic overreport work being done on your vehicle. These tend to be more administrative in nature, and can often be avoided with proper research and fact-checking.

Responding to Suspected Car Insurance Fraud

If you suspect you’ve been the victim of a car insurance scheme, take the following actions:

  • Collect as much information as you can. First, collect and document as much information as possible. Take photos and video of the scene of the accident, look for witnesses who can attest to what happened, and get the names and addresses of any passengers in the other vehicle. The more documentation you have, the less room there will be for fraudulent claims.
  • Run a license plate lookup. You can also run a DMV license plate lookup to get more information about the driver of the vehicle you hit. You may discover this person has run similar schemes in the past, or equip yourself with information you can use to take legal action.
  • Get the police involved. Always get a police report on the scene of an auto accident. They’ll be able to document the crash as thoroughly and unbiasedly as possible. They may also be able to help you if you suspect insurance fraud.
  • Contact your local insurance fraud bureau. Each state has its own insurance fraud bureau, where you can report suspected cases of insurance fraud. You can also call the National Insurance Crime Bureau at 1-800-835-6422.
  • Only seek services from those you trust. Don’t visit a mechanic or medical professional at the behest of another person. Only get services from service providers you trust.

Preventing Car Insurance Fraud

There are also steps you can use to prevent car insurance fraud from happening to you:

  • Invest in a dash cam. Installing a dash cam is a simple and relatively inexpensive way to ensure you’re protected against staged crashes. It will record exactly how the collision occurred, so it doesn’t boil down to your word vs. the word of a fraudster.
  • Allow more space between vehicles. The more distance you leave between cars, the more time you’ll have to react to unexpected changes in traffic. That could mean the difference between ramming into the back of a scammer’s car or coming to a complete stop in the nick of time.
  • Be cautious when following gestures. When someone waves you on, be extra cautious. Go slower than you usually would, and pay attention to what the car does next. When in doubt, take the safest and most conservative course of action possible.

Car insurance fraud can happen to anyone, but if you’re adequately prepared, you can prevent it from negatively impacting your life. The more proactive you are, and the more careful you are in response to a potentially staged collision, the better.

 

About Rohit Shetty

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