Auto Insurance Scams to Avoid

How To Avoid Insurance Scams

Fraud is the second most prevalent white-collar crime in the United States after tax evasion. It is estimated that insurance fraud alone costs each American family between $400 and $700 a year according to the FBI. Do not fall victim to these common auto insurance scams.

1. Staged Crashes

While it seems that most drivers would like to avoid getting into a car accident, some con artists will intentionally cause an auto accident to create an insurance claim. Some people even work in groups, with other members of the team giving false witness statements to support the false insurance claim.

To avoid staged accident scams, drive carefully and use common sense. Be sure there is plenty of distance between you and the vehicle in front of you. One common scam is the “sudden stop,” where drivers slam on their brakes causing the driver behind to rear end them.

Also, always call the police to an accident scene. It can be nearly impossible to prove the truth about an accident if the police did not file a report. If after the accident the other party states that the damages or injuries were worse than they were or that it was your fault when it was not, there is nothing you can do to protect yourself if you do not evidence of what actually happened. A driver exchange form, the form the police give drivers after an accident, is the best, most reliable piece of evidence you can have. Always get one and hold onto it.

2. Fake or exaggerated injuries

The second stage of personal injury insurance scams is fabricated injuries and symptoms after an accident. If you are responsible for an accident, do not offer to settle the case or pay any medical expenses without seeing some evidence first. In fact, you should always talk to an attorney if anyone ever accuses you of negligence and wants compensation.

Con artists can and do create fake injuries and exaggerate the symptoms and severity of an injury they do have. That is why medical records and bills are so important in a personal injury case.

3. Collision Repair Fraud

Finally, always watch out for insurance scams at the repair shop. Unscrupulous and dishonest collision repair operators use several different versions of common fraud.

A. Airbag Fraud

Some repair shops replace deployed airbags with stolen, damaged, or other previously deployed air bags. It can appear that the airbag has been replaced when it has not.

B. Bandit Tow Trucks

Some tow truck drivers patrol the streets looking for accidents. They will come to an accident scene and offer to tow the damaged vehicle to a legitimate repair shop. Instead of repairing the vehicle, the repair shop will hold the vehicle ransom until an exorbitant fee is paid.

C. Inflated Damage Estimates

Some repair shops will estimate charges for work that they do not plan to complete or for parts they do not plan to install. Dishonest shops sometimes also inflate their estimate by reporting that the vehicle is more damaged than it really is.

To avoid these auto insurance scams, use common sense. Use a repair or body shop that has been recommended to you by word-of-mouth or your insurance company. Look for Automotive Service Excellence (ASE)-certified body technicians. Ask for a written damage report rather than a simple estimate, or ask for a warranty on installed parts and paint work.

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