Avoiding Auto Insurance Fraud

Don’t fall victim to car insurance fraud! Disarm fraudsters with these easy tips and keep saving on car insurance

As anyone who has been in a fender bender can attest, they are a traumatic event. And with close to 200 million vehicles on America’s roads and close to 16,000 accidents occurring daily, car crashes are a reality in today’s world.

But what if some of those traffic accidents were actually choreographed events worthy of praise from a Hollywood director? Unfortunately, it happens to thousands of drivers a year across the Nation through car insurance fraud scams with ominous names like the Shady Helper, the Terror Stop, and the Sideswipe.

They are just a few of the tricks that scammers use to perpetrate car insurance fraud on unsuspecting drivers in order to file bogus claims for fake injuries and inflated damages which push everyone’s insurance premiums up and may even result in a traffic fatality. Auto insurance fraud swindlers cost insurers about $30 billion a year and American families an extra $300 yearly in additional premiums, according to the National Insurance Crime Bureau.

The most common auto insurance fraud scams, according to the Coalition Against Insurance Fraud, include the following:

  • Sideswipe – At a hectic intersection while turning left on dual left-hand lane, fraudsters wait for the unsuspecting driver to slightly drift into the outer lane and then slam their car into the victim’s in this common car insurance fraud trick.
  • Swoop and Squat – The unsuspecting driver is quickly cut off (Swoop) by a vehicle that brakes suddenly (Squat) causing the victim to rear end the fraudster who will then pretend to suffer back and neck injuries. In some cases in this auto insurance fraud swindle, an additional car is used to box the victim in so when the “swoop” occurs the victim can’t veer away from the “squat.”
  • Drive Down – This car insurance fraud scam is also known as the Wave and occurs when a victim is merging into a lane or traffic and is waved forward by a yielding fraudster who then runs into the victim’s car and then denies the wave. Also occurs in parking lots.
  • Shady Helpers – “Helpful” strangers approach or telephone car crash victims soon after a staged accident in this auto insurance fraud rip-off. The Shady Helper will try to convince the victim to have their damaged car repaired at a certain body shop where the repair cost can be inflated. Specific doctors, lawyers or treatment centers are also recommended for the same purpose.

Car insurance fraud isn’t limited to accidents though with hucksters also selling bogus car coverage or filing fake claims with stolen policy numbers. Drivers can protect themselves with these tips from Auto Insurance Monitor:

  • Be wary if an insurer’s premiums are significantly less the average premium or the offer is too good to be true. Follow up with the state’s insurance governing body or Better Business Bureau to check out the company or insurance broker.
  • Leaving an insurance identification card in plain sight is an invitation for auto insurance fraud. Keep the card secured in the glove box or another secure area.
  • Reputable insurers do not have agents going door-to-door or “cold callers” selling coverage. Avoid these offers regardless of how tempting the price or coverage is.

In the unfortunate event a car accident does occur, drivers should take the steps below to minimize becoming victims of car insurance fraud:

  • Drivers should take as many pictures of the accident scene as possible and get as much information from the other party and any other passengers or witnesses. Information should include:
    • Names, phone numbers and home addresses of all involved.
    • Other driver’s insurance policy number, vehicle type, registration number, license plate number and license number.
    • Inform law enforcement an accident occurred and get an accident report, regardless if the accident was minor.
    • Auto insurance fraud alerts should be going off if any Shady Helpers suddenly pop up at the scene of the accident.
    • Avoid signing any blank insurance claim forms and steer clear of doctors insisting on filing fake injury claims.

Traffic accidents can’t always be avoided but preventive measures like driving defensively and not tailgating can go far in reducing car insurance fraud.