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Protection Against Auto Insurance Fraud

Preventing Auto Insurance Fraud

Car insurance fraud is on the rise, and it affects every driver, whether you know it or not. Even if you are not directly involved, the widespread existence of insurance scams leads to increased premium costs in policies and longer waits for your insurance claims to be processed.

If you are directly involved, you can be swindled, suffer negative effects on your driving record, or even suffer injuries from a staged accident.

Accidents make up some of the more devastating types of car insurance fraud cases. They can cost the victim time and money and may even result in injuries.

An accident-related fraud incident is often referred to as a “hard car insurance scam.”

Hard Car Insurance Scams

A hard car insurance scam happens when one person or multiple individuals cause an accident on purpose with the intention of filing insurance claims and making money.

The FBI describes multiple common scenarios that include one or more dishonest drivers and may include planted witnesses.

Example: A driver waves you forward to merge, accelerates to plow into you as you try to merge, and later denies that he gestured you forward.

Safe Driving for Accident Prevention

Protect yourself by driving safely, and always keep a substantial distance from vehicles in front of you. Insurance fraudsters love tailgaters; following a car too closely can create an easy set-up for a staged auto accident.

To learn more, visit our page on staged accidents.

Steps to Take After an Accident

You are likely to be rattled after a car accident, so plan ahead.

Keeping an accident checklist in the glove compartment can guide you through the steps you should take after an accident.

First, it’s important to have a camera or smartphone to take photos of the accident scene. You’ll want to take snapshots of:

  • The cars that were involved and their damage.
  • People around you.
  • Road signs.
  • Scenery.

There are some additional steps to take right after an accident in order to protect yourself against car insurance fraud:

  • Take notes and be sure to record the following for everyone involved in the incident:
    • Name.
    • Address.
    • Phone number.
    • Driver’s license number.
    • Auto insurance information.
  • Call the police.
    • The police report helps protect you against perpetrators of fraud who might damage their own car further after the accident to inflate their claim.
  • Be leery of "helpful" people who immediately appear on the accident scene and advise you to use a particular service provider. Any of those seemingly helpful people could be involved in the scam and may recommend corrupt:
    • Towing companies.
    • Doctors.
    • Attorneys.
    • Auto body shops.
  • Never sign a blank claims form.
  • Contact your auto insurance carrier immediately after the accident, even if you feel you're not at fault.
  • Don’t admit fault.

Avoid Towing Scams

A tow truck scam can occur any time you are in trouble on the road, such as when you have a flat tire or your car battery dies.

In these scenarios, before you even have a chance to call a tow truck, one appears almost miraculously and the driver offers to help. You might end up paying through the nose or even losing your car if the tow truck driver is part of a scam.

These tips can help you protect yourself:

  • Never accept help that you did not request/call.
  • Do not accept help before seeing an official invoice.
  • Give out only limited personal and insurance information.
  • Call the police if you have suspicions.
  • If you suspect fraud, file a claim with one of the following:
    • The Better Business Bureau.
    • The Insurance Department in your state.
    • Your insurance company.

Auto Repair Scams

Repair scams can occur when the car service shop contracted by your car insurance company is dishonest. They might put in counterfeit parts, such as air bags, to save money. These can be life-threatening if your air bag does not work properly in a subsequent accident.

Repair shops may also give you a low estimate and then significantly increase the price.

Preventing Fraudulent Repair

You can help to avoid getting taken in by a shady repair shop by taking the following precautions:

  • Research repair shops or get recommendations BEFORE you need one.
    • Your auto insurance provider might have recommendations, or you can contact the Better Business Bureau.
  • Request a written estimate before the repair shop begins work.
  • Ask for your old part back when the job is finished to ensure the part actually gets replaced.
  • If getting an airbag replaced, try to check it before it gets installed to make sure it’s new (sealed).
  • You can also check that your airbag is new by looking at the invoice to see whether the shop purchased it from a dealer or manufacturer.
  • Ensure your bill includes an itemized list of all work and each part they used.

Medical Scams

False medical scams drive up insurance premiums. Examples include the following:

  • You are given expensive care that you do not need.
  • Your diagnosis is falsified.
  • You are double-billed.
  • You do not receive treatments that you or your insurance company have paid for.

Preventing Medical Fraud

If you receive medical treatment after an accident, only agree to the services that you need.

Also, be sure to ask your insurance providers what is covered, and to whom you may go for services. Take notes of your ailments after an accident.

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