Fraud resulting from an auto accident is both costly and dangerous, and it is on the rise. Accident related fraud occurs when an individual causes an accident on purpose so that he can make money from an insurance claim. In 2007, insurance fraud as a result of an auto accident added between $4.8 billion and $6.8 billion in excess payments to auto injury claims. This means that people who commit auto accident fraud raise the insurance premiums for all auto drivers; the insurance companies need to pad their profits to deal with bogus claims. As such, fraudulent claims lessen the money available for legitimate claims while raising suspicion among those involved in genuine car accidents. Sadly, this decreases the amount of money your insurance company will give you for the damages you sustained.
Unfortunately, the victim still pays the price for accident fraud. You could have a costly claim on your record, which could increase your insurance premiums, and most importantly, you and/or a loved one could be seriously injured or killed. Truthful citizens like you can work against those committing fraud by driving defensively, documenting the accident with pictures and detailed notes of those involved, calling the police as soon as an accident occurs, and helping honest victims of a suspected fraudulent accident.
You are not alone – thousands of people are victims of fraud each year. The Coalition Against Insurance Fraud estimates that insurance fraud costs at least $80 billion each year, or almost $950 per family. The following are some examples of common fraudulent scenarios.
Accident Related Fraud
- Drive-Down: a driver waves you on, indicating it’s safe to proceed past the car, and then intentionally hits you, the passing car.
- Hit & Run: using a pre-damaged vehicle, an individual claims he was in an accident and can’t identify the other driver.
- Sideswipe: a driver in the inside lane of a dual left-turn lane drifts into the outer left-turn lane you occupy.
- Swoop & Squat: a multi-person scheme in which the vehicle you are following is suddenly passed by another vehicle that “swoops” in front of it. This causes the vehicle in front of you to stop abruptly, or “squat,” forcing you to rear-end the vehicle in front of you.
Look out for the following fraudulent behavior after an auto accident.
- Exaggerated Claims: A claimant inflates the severity of bodily injuries or physical damage from an accident.
- Medical Fraud: A medical provider recommends unnecessary procedures, bills for services they do not provide, or inflates the bills for services.
- False Health Claims: A patient or provider purposefully submits a false statement in a health insurance claim or application.
- Never accept towing help that you did not request/call.
- Do not accept help before seeing an official invoice – make sure you are not charged an exorbitant fee.
- Give out only the minimum required personal information.
- Call the police if you have suspicions.
Auto repair scam
- Research repair shops and get recommendations from trusted sources.
- Request a written estimate (with itemized services) before the repair shop begins work.
- Ask for your old part back when the job is finished to ensure the part actually gets replaced.
- Make sure your bill has an itemized list of all the services performed and each part used.
- You are given unnecessary care (misdiagnosed to perform more unnecessary procedures).
- You are over charged.
- You do not receive treatments that you or your insurance company paid for.
Contact your state insurance fraud bureau or call the National Insurance Crime Bureau if you suspect a scam. The toll-free number for the National Insurance Crime Bureau is 1-800-835-6422 (24 hours a day, seven days a week).