A recent report says that car accidents staged by scammers in an effort to collect fraudulent insurance claims are on the rise. These bogus wrecks affect all car owners’ insurance rates and can lead to a large increase in the premium rates for those unlucky enough to be an unwilling participant in these well-planned crashes.
A report was released on May 10, 2010 by the National Insurance Crime Bureau which showed that questionable claims from staged accidents increased 46% from 2007 to 2009. The report points out the top five states for staged accident questionable claims: Florida, New York, California, Texas and Illinois.
The Federal Bureau of Investigation notes that staged accidents defraud insurance companies of about $20 billion annually. This loss gets passed onto the consumers in the form of higher insurance rates, about $200 - $300 per car.
The innocent victims who are successfully targeted by these staged auto accidents can expect their own insurance premiums to rise anywhere from 10% to 40% depending on their carrier’s surcharge rate schedule.
The National Insurance Crime Bureau says, “Staged accidents are dangerous criminal events that target innocent drivers with increasingly bold schemes aimed at defrauding insurance companies out of millions of dollars. Unless someone becomes suspicious, many of these staged accidents go undetected.”
The scammers normally work in large groups to stage the accidents. The scam car will normally be loaded with passengers, each of whom will make their own false medical claim with the victim’s insurance company for the amount of about $10,000. Whiplash or other soft tissue complaints will be “verified” by sleazy doctors, physical therapists or chiropractors who are in on the scam. Crooked auto repair mechanics will often be involved to inflate the reported damage to the victim’s insurance company.
Late last month over 32 suspects were arrested and additional warrants issued for 22 others when the Hillsborough County Sheriff’s office cracked down on a highly organized auto insurance scam ring in Florida. Along with the scammers posing as both drivers and passengers, employees from two different medical clinics in Hillsborough County were also arrested for being involved in the scam.
Here are some of the top scams that are being used by those fraudsters practicing staged auto accidents:
SWOOP AND SQUAT
The car loaded with passengers will swoop in front of the victim and quickly break thus causing a rear-end collision. The driver and passengers of the scam car will complain of various aches and pains, either back or neck issues in particular. These complaints will come even if the accident happened at low speeds. The driver and passengers will then each make large injury claims against the victim’s auto insurance policy.
While the victim is trying to merge in traffic, or pull out of a parking spot, a nearby scammer will slow down and wave to the victim encouraging them to proceed. After next crashing into the victim’s car, the scammer will deny ever giving consent with a wave and blame the accident on the victim.
Caution should be taken when driving the inside lane of a dual left-turn lane at a busy intersection. Cars that drift into the outer lane while turning are often then rammed by scammers.
Whether in an honest accident or the victim of a staged auto accident, there are scammers will approach potential victims at a crash site or phone them shortly thereafter. These strangers will often try to convince the victims to visit a specific auto body parts store, chiropractor or recommend a lawyer who might help sue for injuries. Beware of this “friendly advice”. Often this is a set-up for bogus auto shops that fraudulently pad their bills, chiropractors or doctors who give poor or no treatment or ambulance-chasing lawyers who encourage the victim to sue the insurance companies for thousand of dollars even when there is no solid case.
The Coalition Against Insurance Fraud offers these tips to avoid being the victim of a staged auto accident gang:
— Don’t tailgate. It’s easy for a scammer to create an accident if the car directly behind is not leaving enough room to break before a collision. Also keep your eyes focused beyond the car in front of you so you can start applying the brakes early if traffic is slowing down.
— Always have a pen and paper handy in your car. Count the number of passengers in the other car if you are in a collision. Get names, phone numbers and driver’s license numbers. Scammers will often try to make claims for more people than were actually in the car. Also take down the license plate number of the other car.
— Take note of the behavior of the other car’s passengers. Are they joking and laughing initially then suddenly hurt and serious when the police arrive?
— Keep a camera in your car, or use a good phone camera, to take pictures of the damage the other car received, its license plate and inspection stickers and the other car’s occupants.
— Call the police to the scene of an accident. Even for minor damage it’s a good idea to get a police report with an officer’s name on it. If said report only mentions a scratch or minor damage it makes it much more difficult for the scammers to defraud the insurance company later.
— If you witness an accident, get involved. If you sense a scam or spot any warning signs offer your assistance to the honest victim.
— If a scam is suspected, please call the National Insurance Crime Bureau 24 hours a day, seven days a week at 1-800-835-6422. Be prepared to provide a license plate number, location of the accident, people involved, why you think this was a fraud, and as many other details as possible.
The roads are dangerous enough and our insurance premiums are already sky-high without the added burden of sleazy scammers causing these accidents and then defrauding the insurance companies of billions of dollars. An ounce of caution might be able to prevent some of these staged collisions, but even those that do succeed can often be thwarted by honest citizens who keep their wits and take the time to record the details of an accident properly. Stay alert out there and drive safely.
NICB has created a series of videos demonstrating some of the most common types of staged accidents. They can be viewed here: