Common Car Insurance Scams

Byadinsurecar

Feb 21, 2022

Insuring your car against price and larceny is a crucial part of protecting yourself financially. But if you ‘re not careful, you can run into trouble before you ‘ve put your foremost 100 miles on the odometer. The National Insurance Crime Bureau ( NICB ) reports that policy fraud is the second-most costly form of white-collar crime in America, costing billions of dollars annually. For some policyholders, insurance can seem intimidating and complicated, and scammers see car indemnity as an opportunity to make money from people ‘s ignorance. Whether by lying instantaneously or exaggerating the accuracy, a scam artist can con car owners and indemnity companies out of thousands of dollars. fortunately, numerous organizations work to prevent and report indemnity imposter. Educating yourself about how policy scam work can make it hard for a criminal to target you.

Types of Insurance Fraud

Reading: Common Car Insurance Scams

An illustration of a young man trying to claim an existent dent as part of his rear-end accident when he is on the phone with his insurance agent. cable car policy fraud can happen at any point from purchasing or selling your car to getting into an accident. here are some types of cable car policy imposter to be mindful of so you don ’ thyroxine make scammed.

Soft Insurance Fraud

cushy indemnity imposter means one of two things :

**Intentionally exaggerate the damage of an otherwise legitimate auto claim. **
For example, you include a dent that already existed on your car as part of the damage or exaggerating injuries to increase injury and lost wages payout.
**Provide false information to guarantee a lower premium or increase the chances of an auto application being accepted. **
For example, you decide not to include a high-risk driver in the household, such as a teen or senior driver, or provide a lower-cost location for the garaging address of the insured car(s).

Hard Insurance Fraud

Hard policy fraud is much easier to detect than piano policy fraud. It is an organized and careful act of staging a car accident, wound, arson or larceny to scam the insurance company out of money. An example of hard policy imposter is person intentionally hitting the brakes in front of you, so you end up rear-ending them. Or you measuredly set displace to your car to claim the insurance money. While some may say that voiced and heavily indemnity imposter are victimless crimes, in reality, any fraud against an indemnity company costs the consumer through increased future premiums.

Common Car Insurance Schemes

An illustration of a rear-end car accident. A young woman is looking at the front of her car while the young man is approaching her. balmy or difficult policy fraud may be tough to distinguish whether you are speaking to an agent or on the road. here ‘s a flat coat on the main types of policy fraud.

Agent Fraud

equally soon as you buy your first car, you become a target for scams. If an policy agent is corrupt, he can steal your money by failing to set up the insurance design he promised you and keeping your payment rather. If you get into an accident, you ‘ll have to pay the costs yourself. other agents prowler extra coverage you do n’t want into your policy. “ Sliding, ” as this drill is called, can add hundreds of dollars per class to your payments, which lets the agent walk away with a higher commission. “ Scammers typically use reverence ( and ) confusion and will pressure consumers to rush, ” noted a spokesperson from the National Association of Insurance Commissioners ( NAIC ) via e-mail. “ They wo n’t invite you to shop around for the best deal or help you verify information using official sources. Remember, they may not be scamming for money alone. They may try to collect information like Social Security numbers and birthdays ( that ) they can former use to create credit poster accounts. ” First-time car buyers, like students, may be specially vulnerable to this kind of victimize. Agents who are unethical may besides target women, people with disabilities and others they believe will avoid confrontation . MONEYGEEK EXPERT TIP The best way to avoid agent fraud is to vet the agent carefully. Do n’t let anyone bully or rush you into signing an agreement before you ‘re quick, and confirm your coverage through the insurance carrier. Research the best car policy companies. Collect and compare several car quotes from a choose group of providers. Loading …

Fake Injury Claims

possibly you ‘re in a first-come-first-serve one day, trying to run a few errands and get home plate. In a here and now of distraction, you get into a buffer curve in the park draw. then, days late, the other driver claims whiplash or other injuries. Fake injury claims can increase your premium payments. According to the FBI, the modal family may see an increase of $ 400 to $ 700 a year. Parents may be a target for this kind of scam since a criminal may see them as distracted and eager to resolve the situation. MONEYGEEK EXPERT TIP Report any car accident to the police, even if it ‘s child. It may be a hassle at the moment, but you ‘ll be better protected if you have a patrol report to provide an official history of the scenery.

Fraudulent Car Repairs

Most of us drive, but not everyone knows their way around under the hood of a car. Mechanics who are unethical carry advantage of customers ‘ lack of cognition and charge top dollar to install deficient parts. deceitful cable car repairs can be costly and dangerous. MONEYGEEK EXPERT TIP entirely take your car to a reputable machinist. Check the Better Business Bureau web site or your insurance company ‘s recommend number to find a trustworthy soundbox denounce. You can besides ask your class members or friends for recommendations.

Staged Accidents

Staged accidents are intricate schemes. Scammers will carefully choreograph an accident. Fake witnesses, doctors and legal advisors may provide bogus testimony or advice. Their unite efforts make it unmanageable for the innocent driver to prove what in truth happened. here ‘s how some of the most coarse staged accident schemes work :

Swoop and Squat – The “ squat ” car drives in front of the victim. A second car cuts the “ squat ” cable car off on the spur of the moment, causing a rear-end collision when the victim ca n’t brake in time, and “ swoops ” away after the crash. A third gear car may block the victim from changing lanes to avoid the collision. Without proof the “ swoop ” car was responsible for the crash, the blame falls on the victim .
Drive Down – The con artist waves the victim to turn or merge at an intersection. When the innocent motorist starts turning, the swindler will speed up enough to cause a crash. The swindler will then claim the victim appeared out of nowhere, or the swindler was swatting a flee.
People may besides encounter other versions of the drive down, such as the entrust become and right turn drive downs. In a left field become drive down, the swindler is heading the early way, slows toss off and waves to the victim who is making a left field turn to go ahead. then the swindler will move forth to block the victim from turning and leave the victim in the in-between of an overlap, causing an accident with another innocent motorist who slams into the side of the victim. The swindler may drive away and leave the victim to work out the details of the accident.

In a right turn drive down, the swindler plans to rear-end the victim as the victim is turning correct and claims there was no time to stop or traffic was indecipherable to make a turn .
Sideswipe – In some intersections, the borders of the inner and outer turn lane are ill-defined. The fraudster will occupy the knocked out lane then sideswipes the victim ‘s car as they are turning. Because of the ambiguous lane division, the perpetrator claims the victim caused the accident .
Panic Stop – A team of con artists fills one cable car, and they slam on the brakes in movement of the victim — sometimes when the victim is distracted while driving. The passengers in the criminal car claim bogus or overdo injuries. Since it ‘s a rear-end collision, the victim is hush considered at fault. The NICB reports that some criminals even intentionally hit or cut themselves before running a staged collision victimize .

Captain Tom Didone, Director of Traffic for the Montgomery County Police Department in Maryland, said it could be difficult for officers to distinguish a stag accident from a natural one. “ Every clock we go to an accident, ” he said. “ There are normally several perspectives that are in conflict. Unless there was a witness, I think it would be difficult for an officer to decide ( who ‘s telling the truth ). ” MONEYGEEK EXPERT TIP Collecting a much information as possible at the picture of the accident can help you win your lawsuit.

The Bad Samaritan

If you get in an accident, beware of people who approach while you ‘re waiting for the police to arrive and file a report. These “ helpers ” might be predators. Scammers pretend to be lawyers, doctors or third-party policy agents or consultants. They try to get your personal information so they can file juke policy claims on your policy. numerous false claims can lead to raised premiums or even passing of policy coverage for you. MONEYGEEK EXPERT TIP Over-eagerness to help could be a crimson flag for such scams. Watch out for people who try to convince you to take an ambulance when you ‘re not hurt, attempt to draw you away from the police or ask a draw of personal questions, largely about policy.

How to Protect Yourself Against Car Insurance Scams

fortunately, you can protect yourself against scams by taking some easy precautions. The NICB offers the follow advice : 1

Drive carefully

As you drive carefully, make sure you keep a reasonable distance between yourself and other cars. Tailgating limits your ability to react in time to prevent a clang. 2

Request an official report

If you get in an accident, even a mild fender bender, call the police and request an official report card with the military officer ‘s name. An official reputation makes it difficult for scammers to damage their car after the accident occurs and file a larger call. 3

Take plenty of notes and pictures

Get pictures of any damage to the cars and photos that show the angle of the accident if you can. Try to take photos of the other people involved in the accident. 4

Be careful of unsolicited tow truck drivers

Watch out for “ friendly ” tow truck drivers who stop at the accident setting before you ‘ve called for aid. Some drivers who are ambidextrous may tow your car at an balloon rate. Call AAA or another reputable service if you need your car tow. 5

Keep a cautious eye on ‘helpful’ bystanders

Be leery of bystanders who show up quickly and try to convince you to contact a particular lawyer, insurance agentive role or doctor. 6

Alert your insurance company

If you suspect you are the target of an indemnity victimize, tell your indemnity caller and the military officer who arrives at the scene. 7

Report the scam

Report suspected scams to the National Insurance Crime Bureau ( NICB ). MONEYGEEK EXPERT TIP It may be a good investment to purchase a dash cam to help document accidents. Depending on the character of daunt cam, what features you want and how many you purchase, it can range from $ 50 to $ 260, based on Amazon prices. The highest-priced cameras have respective lenses to capture footage from the front, back and inside of your fomite and may have a night-vision feature.

At-Risk Groups

Certain demographic groups may be targeted more much for scams because criminals think certain people are easier to intimidate. Scammers and victimize artists besides target people who may help them obtain more money. These higher-risk targets include women, seniors, drivers operating work vehicles or big rigs and luxury car drivers. Being part of one or more of these groups does n’t necessarily mean you ‘ll be victimized or that you are an easier target than anyone else. Staying argus-eyed and taking recommend actions to protect yourself can keep a victimize attempt from succeeding.

What to Do if You Become a Victim of a Scam

car policy scams can be fabulously nerve-racking. If your vehicle is totaled or you discover after an accident that your policy policy is hypocrite, your mobility and finances can take a hit.

Alert Your Insurance Agent

James Quiggle, director of communications for the Coalition Against Insurance Fraud, urges people to report suspected imposter. “ Share your concerns with your insurance company and with your state insurance department. They may launch an investigation if you have compelling attest, ” he said, such as $ 80,000 in claim checkup bills from a 2-mph fender bender in a park lot. Alerting your policy company representatives to your suspicions is significant. They are the ones who will help cover your damages, so the oklahoman they understand what happened, the sooner they can work to resolve the problem. Ask the example what your options are for getting reimbursement for a lease car if you need one or replacing expensive condom equipment like baby car seats.

Document Everything

Collect detailed records to confirm your report of what happened. Set up a filing drawer in your home to store crucial information about your car. Keep the keep up records in a safe target :

Your insurance policy
Premium payment records
Copies of estimates and bills from mechanics
Notes and photos from the scene of an accident involving your car
A copy of an accident report from a police officer, if you can get one

Whether you ‘re concerned about an insurance agent, machinist or accident, your records may determine your ability to prove unethical or criminal behavior.

Report the Scam

The NAIC and the NICB, among other organizations, besides collect reports of imposter. Check out the resource list at the end of this article to learn more about reporting a scam. Depending on the damages you ‘ve suffered and your software documentation of the victimize, you may be able to pursue legal military action against the scam artist. however, before you rush to file a lawsuit, talk to a lawyer about whether your chance of achiever is worth the time and campaign. “ The standard is the preponderance of evidence beyond a reasonable doubt. If you are in a crash and people are injured, and you do n’t have coverage ( due to agent imposter ), you may have grounds for a civil courtship, ” Quiggle said. “ A lawyer can advise you on whether a lawsuit makes smell. ” Loading …

Frequently Asked Questions About Car Insurance Fraud

With cable car policy victimize, some park questions that come up. here are the answers to some of the most coarse questions asked about cable car indemnity imposter .

The across-the-board definition of car insurance fraud is any fraud committed against a cable car policy company. Consumers or agents of the policy company can engage in victimize. money lost to scams is then passed onto the consumer in higher premiums, up to an average extra $ 700 per year. If you are worry about your premiums, it may be a good mind to reevaluate your stream plan and attend at other car insurance companies. Compare their car quotes and decide which matchless has the most low-cost coverage .

If you are aware of a car insurance victimize, it ’ sulfur best to report it and have an probe started. There are several places you can report the indemnity imposter dodge :

The fraud department of the car insurance company in question
National Insurance Crime Bureau (NICB)
Coalition Against Insurance Fraud (CAIF)
National Association of Insurance Commissioners (NAIC)
Your local FBI office

sometimes, you might not know you ’ re a victim of car insurance fraud. here are some signs you may see that can point towards a deceitful title scam :

The person is unusually knowledgeable about the accident process, including correct terminology and the ins and outs of how car insurance policies work.
A high history of claims in a short period of time.
An accident occurs soon after a car purchase or registration, or after full coverage is added.
Multiple injuries or extensive vehicle damage without a valid police report.
Attorney letter of representation filed the same day or soon after the accident occurred.

You might not think a little white lie hurts anyone, but if you ’ re capture, it could have serious implications. indemnity fraud costs billions of dollars each year, and you could face :

Car insurance application denial
Inability to get car insurance in the future
Fines and penalties
Jail time and/or criminal penalties (plus a criminal record)
Claim denial
Increased insurance premiums

It ’ s not worth the risk of getting catch and charged if you commit soft policy imposter by lying on the application or overstating your car claim.

Expert Advice on Protecting Yourself Against Insurance Fraud

Spotting and avoiding policy scams can save you money arsenic well as help oneself you keep peace of beware. Our experts talked to MoneyGeek about the best anti-scam strategies .

What are the most common car policy scams that people should be mindful of ?
Are there any groups that are targeted more often for cable car policy scams ?
How can I avoid becoming the victim of a victimize ?

James Quiggle film director of Communications at Coalition Against Insurance Fraud Chad Marzen American General Insurance Associate Professor of Insurance Law at Florida State University

Resources on Car Insurance Fraud

There are many resources available to help with sympathy and report car insurance victimize and fraud. These anti-fraud agencies, programs and resources are available in your state and nationally. Some of the links below will take you to state-specific resources you can use to learn more or report policy fraud.

Local or State Resources

State Attorneys General: As the “People’s Lawyer,” the attorney general for your state or territory can help you file a claim and provide additional resources.
Highway Patrol or State Police Websites: Use this page to find the link for each state’s highway patrol or state police website to help you file a fraud claim.
Insurance Regulators by State: Find the department of insurance for each state from this list, so you can locate resources to file a car insurance fraud claim.
Map of National Association of Insurance Commissioners states and jurisdictions: Use this map of states and jurisdictions to look up your state’s insurance commissioner to report a fraudulent insurance agent.
American Automobile Association (AAA): The American Automobile Association (AAA) automatically directs you to the site for your region. If you are a AAA member, you can contact an agent about suspected scams.