The Most Common Auto Insurance Scams

Posted on Jan 12th, 05:59 pm, under Auto Insurance 101

Have you ever been in a car accident? You may not have realized it then, but you may have been the victim of an insurance scam. All over the country, car accidents are set up and faked by experienced con men and fraudsters in the hopes of cheating insurance companies out of thousands of dollars in damages.

To guard against these scams, insurance companies spend millions of dollars every year. And the worst part is that it's not the insurance providers who shoulder the burden -- it's you, the honest consumer. Since there is no law that forces them to shoulder the burden, insurance companies pass the costs of fraud on to their customers by raising premiums across the board. 

Con artists usually rehearse their fake "accidents" carefully before they put them into action. Learn to protect yourself against auto accident fraud by familiarizing yourself with their techniques. Here are some of the most common scams:

1. The Swoop and Squat - In this scheme, the scammer's vehicle will suddenly swoop out in front of the victim's car and abruptly stop (or squat). An accomplice quickly moves alongside the victim's car to keep it from leaving the scene. Then, the passengers in squatting car will all claim injuries from the "accident", which will be supported by a chiropractor or doctor who is also in on the scam. 

2. The Fake Helper - This may happen to you after a genuine accident. If a stranger offers to help you with an accident's aftermath by suggesting a particular lawyer, doctor, or repair shop, beware -- it could be a trap. The doctor may give you fake treatment (or even none at all); the repair shop will probably inflate your repair cost; and the lawyer may even tell you to sue the insurance provider.

3. The Drive Down or Wave - This deceptively simple scam is easy to fall for. In a situation with a lot of traffic or one that involves merging lanes, the con artist waves the victim on, indicating that he's yielding the right of way. Just as the victim enters the lane, the con artist suddenly accelerates and hits the victim's car. When the traffic police arrive, he will state that he never gave the victim the right of way in the first place.

4. The T-Bone - This particular scam requires careful timing on the part of the fraudster. As your car passes an intersection, the fraudster will deliberately run into it with his car. Then, when the police arrive, accomplices posing as witnesses will tell the officer that you ran a red light. This is most effective when there are no genuine witnesses who can contradict the accomplices' fake accounts.

5. The Sideswipe - A scam that's insidiously simple to fall into. At intersections with multiple turn lanes, take care not to drift out of your lane when turning. A scammer in the lane next to you will speed up on purpose so that you hit their car. This can already be considered a sideswipe, and because you were the one who strayed outside your designated lane, the scammer has a claim against you and will often pursue this along with personal injury claims.

So now that you know about the most common techniques that scammers use, what do you do next? In the case of any accident, the best thing to do is get sufficient documentation. If your mobile phone has a camera, use it. Otherwise, keep a disposable camera in your glove compartment. Take pictures of all the vehicles involved. Have pen and paper handy, so you can record any important information about drivers, passengers, and witnesses. Read more on what to do after accidents here.

Make sure you take note of vital details. Were all parties involved wearing seatbelts? Did the injured parties act like they were injured as soon as they got out of the car, or only after the police arrived?

If you think that you're being scammed, or if you've witnessed fraud in action, call your insurance firm as soon as possible. And most importantly, don't forget to call the police! Don't let scammers convince you into leaving the authorities out of the matter. Finally, always drive responsibly in order to avoid accidents in the first place.