Best car insurance scams
Top 10 insurance scams
The UK motor insurance industry paid out £19.1m in claims every single day in 2013, according to the Association of British Insurers (ABI), resulting in insurers making a £286m overall loss. With so much money available, it’s easy to see why a less-than-sincere person or gang would attempt to make illicit gains via insurance fraud. It’s a problem that’s estimated to cost over £1bn per year in the UK.
Here are the most common scams:
Read moreMark Nichol, Creative Editor
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Fake whiplash claims
According to ABI figures, the national cost of whiplash claims makes up 20 per cent of the average insurance premium, while insurer Aviva claims that a staggering 94 per cent of all its compensation claims for motor accidents relate to minor whiplash.
Minor whiplash is very hard to prove or disprove, but if you suspect someone is fraudulently claiming whiplash against you after a small collision, seek the advice of a solicitor to see if you can fight it.
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Glenn Biffen on 20 February 2017Received a blatant call this morning (20th February) from the following number 0121 146 3212
The usual call features; "our records show you've been in an accident..."
She hung up when she didn't get the response she was after - which was polite. Reply | Report as offensive | Link
firstname.lastname@example.org on 3 April 2017I got the same but on 01219926848 in April,they are changing their phone number ever month maybe. Reply | Report as offensive | Link
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If you get into a minor car crash, such as a rear-end collision, one of your first thoughts may not be to suspect fraud.
However, you should consider it. In the U.S., fraud is the second most costly white-collar crime after tax evasion, according to the National Insurance Crime Bureau (NICB).
Car insurance scams, such as staged accidents, often involve an entire organized crime ring. Its members might include a number of drivers, passengers with fake or exaggerate injuries, and doctors who create false claims for treatment after the incident. Ten percent or more of property and casualty insurance claims are fraudulent, according to the NICB.
For innocent drivers, these scams can add blemishes to a driving record and increase premiums. They might also result in injuries or even death.
Here are five of the top car insurance scams to be aware of, and what you can do to avoid falling victim to them.
1. Forced rear-ending
In this scam, the car ahead of you stops suddenly, and you crash into the back of the vehicle. Even though the driver of the front vehicle staged the accident, rear-end collisions are usually considered to be the fault of the driver in back.
The passengers in the car you hit might complain of neck and back pain. In some cases, occupants of the other car may file claims for injuries and car damage.
Be wary of passengers or drivers who, after getting in the accident, appear to be uninjured – but when the police arrive, they instantly start complaining about their injuries.
Your location may play a role in the likelihood of coming into a scam while on the road. California, Florida, and Texas were the states with the highest number of questionable insurance claims in 2012, according to the NICB.
To avoid a collision, "Use the three-second rule," says David Bakke, editor at Money Crashers, a personal finance site. Choose a landmark ahead of you. When the car in front of you reaches this point, start counting. You'll want to reach three before you pass the same point.
2. Forced head-on crash
This scam involves two vehicles, and often occurs on busy city streets. On a two-way street, one car parks and blocks traffic coming from the same direction. Your car approaches the parked vehicle that is blocking traffic and in order to pass the car, you have to pull into the other lane of the street. The lane, however, has oncoming traffic.
When you move into the oncoming traffic lane to pass the parked car, another car approaches you from the opposite direction. This car hits your vehicle, resulting in a head-on collision. Since you were driving against traffic when the crash occurred, it will appear that you are at fault.
If you have any suspicion of fraud in a crash, make sure the police officer knows, says John Moran, owner of The Hallahan Group Inc., an investigative agency based in New York that investigates insurance fraud.
3. The right-of-way trick
This con can occur when another driver signals that you can merge, but when you do, the other driver causes a crash. The driver then denies making any gestures, and blames you for the incident.
The scam can also take place at an intersection with a stop sign. While you wait at the stop sign for a vehicle to pass, the driver of the vehicle motions for you to go ahead. When you pull out, the other vehicle hits your car and then claims you caused the incident, since you didn't have the right of way.
To avoid getting tricked, "be very careful when merging into traffic," Bakke says. "If someone starts signaling to you in an unsolicited fashion, ignore it."
4. Jump-in victims
This fraudulent act involves passengers showing up after a crash. "There's one person in the car you hit, (but) it's not uncommon to see four or five people that are claiming injuries," says Frank Scafidi, director of public affairs at the NICB.
These extra "victims" then go to a shady clinic that will make up treatments they need. The clinic will bill the insurance companies for unnecessary procedures, and the patients will get paid for their role in the scam.
If you get into a crash, pay attention to the other driver and passengers involved. Note how many are present immediately after the crash. If possible, take pictures with your phone or camera to document the number of people.
5. The phony helper
In this scam, you first get into an accident. Then, at the crash scene, a seemingly friendly person approaches you and offers you the name of a great doctor, lawyer or repair shop.
While it may seem innocent, the recommended businesses are likely involved in a scam. The doctor or lawyer might charge sky-high bills for nonexistent injuries or damages. The auto shop may make up repairs, or charge exorbitant prices to the insurance company and then carry out the work for a much lower cost.
Insurance criminals are not easily identifiable, according to the NICB. They don’t usually carry weapons, and can come across as people who want to help.
To steer clear of phony helpers, "resist the urge to use any repair company, lawyer or doctor that the other person suggests in an accident," Bakke says. Instead, call your insurance agent to discuss your options for repairs.
Getting into an accident is bad enough, but it’s even worse to find that you have been the victim of an insurance scam. According to Edmunds, more than 20% of the bodily injury claims and approximately 10% of the property damage ones are fraudulent. Insurance scams don’t necessarily have to be correlated with an auto accident – you could get scammed in many other ways. Here are the top 10 car insurance scams, and how to stay away from them.
This technique is one of the most frequent scams you will run into. You do your research, come up with the cheapest car insurance quote ever, get all excited about it, sign the contract and, a couple of months later, you get a notification saying there has been a “company rate error” and that your actual quote is a few hundred dollars higher. They rely on you having become emotionally attached to that company and not going to bother to switch carriers again.
2. Baiting and switching
This technique is a bit similar to the lowballing one. You get presented with a quote that also sounds too good to be true, but when you are about to close the deal they tell you that it had just expired. Instead, you will be offered something more expensive – usually a bundle of insurance packages so that you cannot spot the price difference. The scammer will, again, rely on you being in the buying mood and becoming emotionally attached to the offering.
3. The phantom victim
This scam refers to people who weren’t in a the car at the moment of the accident filing injury claims with your insurance company. This is especially easy for scammers to try this with online filings. You can’t prevent this scam unless you monitor the other driver for the next few weeks after the accident. Also, you are highly advised to thoroughly document damages and injuries after a car accident – put down the names of the injured passengers, take photos and – most important – get the other driver to sign a statement that the information you have gathered is accurate.
4. Adding previous damage to a claim
There are many cases where a driver would simply add previous damage to a claim filed with your insurance company. There are cases where you cannot do anything about it. If, for instance, the rear of the other car had already been damaged (for example, the driver had backed up into a lighting pole in a parking lot) and you rear-end him, then it’s quite hard to tell what damage was done when.
5. The yield scam
In this situation called “the drive down,” a friendly stranger who has the “right of way” in a crossroad would wave or flash the headlights and invite you into traffic. Afterwards he will just ram into the side of your car and deny having given you permission. There is nothing you can do about it then, other than staying alert and not accepting this kind of invitations.
6. Personal information data mining
Some bogus insurance agents might call you and offer you a free quote, no strings attached. In exchange, you will have to give him your personal information. Don’t be fooled by this – giving out your personal details over the phone to an unknown person might lead to your identity being stolen.
7. Fake insurance agents
Just because an agent has a storefront or a website it doesn’t mean that they represent a genuine insurance company. A proof of insurance card can be forged, just as a business card or letterhead can. An obvious giveaway sign is when the agent sells his own insurance policies – he can’t do that because agents represent insurance companies and aren’t insurers per se.
8. The fake injury claim
This can happen with any kind of accident. The other driver or a passenger in the other car will report back pain, whiplash or other injuries. He or she will cooperate with a crooked doctor to get the paperwork done, then seek hospitalization and file an injury claim with your insurance company. A way to steer clear from being scammed this way is to file a police report for any minor accident – when the police writes down that there were only minor scratches or fender benders in the accident, then it will hard for your insurance company to believe that medical assistance was needed.
9. The forced rear-ending
This is also quite a frequent scam. The con will come to a full stop or swoop in front of the victim, causing you to crash into them from behind. In almost all jurisdictions, the driver who hits another car from behind is considered to be at fault. The only way to stay away from such a scheme is to be alert in traffic and never follow other cars closely.
10. Fake car insurance company
With the increasingly high online presence of genuine insurance companies, con artists have made their way through. A scammer would put up a website claiming to be an insurance company no one has heard of, and offer really cheap quotes. They might even go as far as mail you forged insurance documents so that you don’t suspect you have been scammed. Make sure you do a bit of background research when you are going to buy insurance from a company you have never heard of.