Auto Insurance Fraud

Auto Insurance Fraud

In most states, automobile insurance is mandatory. You may be knowledgeable about your insurance company and your coverage, but what do you know about automobile insurance fraud? Automobile insurance fraud totaled from $4.8 billion to $6.8 billion in claims in the recent years. Automobile insurance fraud is becoming one of the United States’ biggest fraud problems.

Types of Scams to Watch for on the Road

Staged rear-end car accidents or swoop and squat are common fraud tactics. This is where one or two participating drivers will stage a scene for rear-end car accident by cutting in front quickly causing the cars behind to slam on the brakes as fast as possible. In some cases, the car that purposefully cut in front the others would drive away innocently. The rear-ended scam driver and the victim would then blame the other car but because that car disappeared the victim would be forced to pay for his own damages and personal injury and potentially the scam driver’s costs as well. The scam driver will collect money for vehicle damage as well as fake an injury to receive money as well.

Adding damage to a damaged vehicle can be done by anyone desperate enough to try. Sometimes a person will leave the scene of the accident and add damage to his car and file for more money from your insurance company. In this scenario, taking pictures on your camera or cell phone is the best way to avoid this scam. Do your best to document all the damage done on both cars before either person leaves the scene of the accident.

Some criminals make good use of driver distractions. Often a scam driver will fill a car with a good number of passengers. One of these passengers is assigned to watch the driver behind in order to report any distraction. When the passenger gives the word that the driver behind is distracted by the cell phone, switching the radio, eating, etc., the driver applies his brakes as hard as possible thus causing an accident. While the distracted driver tries to claim that the other driver stopped for no reason, his claim does not matter because he hit the other driver. The scam driver collects money for his car as well as money for the “injured” passengers.

Types of Scams to Watch for Relating to Automobiles

As desperate economic times have come, people are taking drastic measures. People have resorted to setting their car on fire and reporting the car stolen or victim of arson as well as deserting their car in a ditch to relieve themselves of the financial burden of their vehicle. However, there are many scams still performed today that are easy to fall prey to.

Often thieves will steal certain components of your car to pawn to a dealer and make a quick buck. The components will usually tend to be more expensive parts such as tires, airbags, and audio systems.

Identity theft is common everywhere in all industries. However, these sly crooks will get your information when you are simply buying a car. These thieves will also steal your identity in other ways and then buy a car. Be sure to monitor all credit card activity and keep your information as secure as possible.

How to Avoid Being Scammed

Unfortunately there is no foolproof way to avoid being scammed. However, drive defensively. Stay alert. Every day as you drive, be aware of the cars around you. They may be scam drivers waiting to drain as much money as possible from you. Do not let your guard down and be distracted, because someone may be watching for it. If you are a victim of a car accident and you detect strange dealings going on, take detailed notes of everything and report it later to your insurance company. Organization and detective agency take reports and thoroughly investigate fraud cases. Do not hesitate to report odd happenings. Also, be sure to thoroughly investigate the creditability of each automobile insurance agency that you use. Your welfare and your family’s welfare may be in their hands, so using a well known, well trusted insurer will benefit your wellbeing greatly.

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