Car Insurance Holders, Listen up: Never Fall For These 7 Car Insurance Scams

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Getting into a car accident, though the damages are minor, is indeed frustrating. You waste time and money repairing your own car and compensating for the third-party damages. But what if getting into an “accident” is no accident at all? What if the “tragedy” was actually planned for fraudsters to reap money?

Let’s talk about car insurance scammers, the toxic people you hope not to encounter on the road. Scammers use innocent drivers as pawns, playing tricks like faking an accident just to claim cash from car insurance. They victimize law-abiding drivers by creating blemished driving records, legal flaws, and higher premiums. companies.

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In the U.S., more than 20 percent of bodily injury claims and 10% of car damage as a result of car accidents are bogus. An article in Bankrate back in 2013 states that in NYC alone, officials estimate that fake auto insurance claims add $241 million to premiums. They’re one of the major reasons why your insurance premiums are higher.

Let’s unmask the worst car insurance scams and how to protect yourself from them.

1. Staged rear-ending collisions

In car insurance policies, the rear-ending driver is almost always regarded to be at fault by failing to leave ample stopping distance. Fraudsters know the drill and prey on innocent rear-end drivers.

The car ahead of you may slow down or come to a stop in a busy traffic. The car will then swoop in front of your car, causing it to crash into yours from behind. The driver will go down, approach you, and claim that you hit the rear of his or her car.

2. Driving down

When waiting to make a turn, you see what appears to be a friendly stranger (scammer) wave you into traffic and persuade you into turning early. The scammer then proceeds just in time and rams into the side of your car then merges into traffic as you do. He’ll then deny having permitted you and leave you accountable.

3. Waving down

Similar to drive down, two vehicles set up a crash with a victim who’s given a “wave”, indicating it’s safe to pull out of a parking lot or side street. The fraudsters proceed just in time to collide.

4. Fake accident

Some con artists even risk their own lives for cash. They act as pedestrians and wait patiently for an oncoming car. They cross the street just in time to bump the car with their bodies and pretend to be badly injured so they could file an injury claim.

5. The not-so-good samaritan

You’ve met a car accident and you’re waiting for the tow truck and cops to arrive. The scammer may approach you on the spot or call you on the phone, thanks to a tip from a crooked tow truck driver or mechanic. This guy may pretend to be a third-party vehicle insurance official or consultant in order. 

Once he gets your attention, he’ll lure you into using the services of a health clinic for your injuries or to using a particular lawyer. But in reality, these are all a setup to steal your information to file false insurance claims of which they’ll take a hefty cut.

Trust no one but your own insurance brokers or agents.

6. Enhanced damages

Let’s say that a legit accident took place. Not-at-fault drivers (scammers) may cause additional damage to his or her own vehicle to pump up a claim.

7. Exaggerating a minor injury

Scammers will gather all their acting skills and resources make it look like they’re suffering from a major injury.

After a collision, the other driver may complain of injuries including back pain or whiplash. The con man would demand hospitalization and that’s where he files an insurance claim with your car insurance company to cover the costs even if it’s bogus. Some scammers go to the extent of contracting with unscrupulous doctors, chiropractors, and physical therapists to fake their injury reports.

How to Protect Yourself from Car Scammers

Insurance scammers are great actors. For years, they intentionally damage personal and business vehicles and even risk their own lives to claim cash from insurers.

To protect yourself from wasting your time and hard-earned cash on these criminals, here are 5 things to keep in mind: 

  • Be extra alert on the road. Alertness on the road is key. Never follow other cars too closely, even in the middle of congested traffic and be very mindful when taking a turn. 
  • Gather as much as evidence as possible. A dashcam is a huge lifesaver for it can capture footage and uncover their fraudulent activities. Ask if there are any surveillance cameras in the area.
  • Don’t give out information to suspicious people. Never ever transact and give out information with third-parties. All of your concerns should only be addressed to your insurance company and the other driver’s insurance company.
  • Get authorities involved, even if the accident is minor. Demand a police report and get the contact information of the fraudster. Every scammer would get startled upon hearing the word “police.” If the record notes only slight scratches and minor damages, the insurance company will be less likely to believe the other driver suffered major injuries. 
  • Stay vigilant around strangers. With several criminal activities existing today, you can’t blame some folks for having trust issues – especially when strangers become “too good to be true” out of the blue.

Author Bio: Carmina Natividad is one of the daytime writers for Insurance Advisernet NZ, one of the largest and most reliable general insurance brokers in New Zealand, providing high-quality risk management advice for business owners. She enjoys writing practical tips and tricks, making complex finance and business topics easier to digest.

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