A common form of auto insurance fraud is a staged accident. Some people actually cause collisions to collect insurance payments for injuries that are either nonexistent or greatly exaggerated.
One form of staged accident involves the car in front of you stopping suddenly for no apparent reason, so you can’t avoid a collision. Another kind of staged accident occurs when you’re merging into traffic or pulling out of a parking space. The person staging the accident indicates it’s safe for you to proceed, but then intentionally smashes into your vehicle and later claims to be injured.
Injuries are typically either “phantom” or soft-tissue ones that are difficult for doctors to confirm medically. The Federal Bureau of Investigations estimates that staged accidents cost the insurance industry some $20 billion a year. This kind of fraud drives up insurance rates for everyone by an average of $100 to $300 a year for each insured car, according to the FBI.
Staged auto accidents are often committed by organized fraud rings that could include attorneys, medical providers and auto repair shops.
How to protect yourself
If you’re in traffic, don’t tailgate. A common cause of rear-end accidents, whether staged or not, is following too closely. You can also watch traffic beyond the car in front of you, so you can brake early if you see traffic slowing down.
If you’re in a collision, count the number of passengers in the other cars. If possible, get their names, telephone numbers and license plate numbers. More people than were actually in the vehicles may file claims. Call the police and get an official report, even if there is little or no damage.
If possible, take photographs of the damage to the other vehicles and provide them to your insurance company to help validate auto repair bills. You can also learn about other important steps to follow at the scene of an accident.
Report your suspicion
If you suspect car insurance fraud, homeowners insurance fraud or medical fraud, please speak up and report it — there are several ways and you can usually remain anonymous. Read further information about the importance of reporting insurance fraud.
