The Dangers Of Faking Car Accidents For Insurance Claims

Auto insurance fraud is a deliberate deception to obtain illegitimate financial gain from an insurance company. This can be committed by drivers, medical professionals, repair shops, and even insurance companies themselves. Soft fraud is the most common form, where individuals exaggerate legitimate claims for financial benefit. This is followed by staged car theft and reporting non-existent injuries. Hard fraud, a more serious offence, involves deliberately causing accidents, staging thefts, or setting up situations where insurance money is at stake. Auto insurance fraud costs companies billions annually, and these losses are passed on to drivers through higher premiums. Committing auto insurance fraud can result in severe penalties, including jail time, heavy fines, and a criminal record.

Staging an accident

Staging a car accident is a common form of auto insurance fraud. This typically involves criminals manoeuvring unsuspecting motorists into crashes to make false insurance claims. The cars involved in these staged accidents usually suffer little damage, but the perpetrators will then submit large and fraudulent demands.

There are several ways to stage a car accident. One method is the "Swoop and Squat" scheme, which involves two cars trapping a victim and forcing them into a rear-end collision. The "swoop" car suddenly cuts off the victim, while the "squat" car drives alongside them, preventing them from changing lanes to avoid the collision. The "swoop" car then speeds away, leaving the victim responsible for the accident.

Another tactic is the "Panic Stop." In this scenario, the perpetrator's vehicle gets in front of the victim's car and waits for them to become distracted. Once the victim takes their eyes off the road, the offender slams on their brakes, causing a rear-end collision. Often, these offenders will have their brake lights disabled to make the accident more likely to occur.

The "Sideswipe" is another common scam. This occurs at intersections with dual left-turn lanes. The perpetrator drifts into the adjacent lane while making a turn, and then quickly crashes into the victim who has drifted into their lane. The offender then claims innocence and submits an insurance claim.

The "Start and Stop" is a similar scam, often staged in gridlocked traffic. The perpetrator, positioned in front of the victim, starts to move forward, encouraging the victim to follow. However, the scammer then slams on their brakes, causing a rear-end collision.

The "Wave-In" scam occurs when a victim is driving in heavy traffic and wants to change lanes. The perpetrator waves the victim forward but deliberately crashes into them as they attempt to change lanes. When the police arrive, the scammer denies having given the signal to the victim, making the victim appear at fault.

There are several red flags that can help you identify potential car accident scams. These include the other driver acting strangely, being prevented from changing lanes, driving in a wealthy neighbourhood, exaggerated injury claims, and being a senior citizen or a young woman driving alone.

If you suspect that you are the victim of a staged accident, it is important to take certain steps to protect yourself. Try to document the extent of the damage, count the number of passengers in the other cars, and, if possible, get their names, phone numbers, and license plate numbers. Additionally, call the police and get an official report, even if the damage seems minor. Taking photographs of the damage to the vehicles involved can also help validate auto repair bills.

Remember, staged accidents are a serious crime that can have significant consequences. The Federal Bureau of Investigation estimates that these scams cost the insurance industry around $20 billion annually, driving up insurance rates for everyone.

Faking injuries

Another way to fake an injury is by falsely using a prior injury as the basis for a new claim. This is known as "hard fraud" and is considered more serious. It occurs when one or more people stage accidents or invent circumstances resulting in real or fake injuries. For example, in a "panic stop" scam, scammers pull in front of the victim's car and suddenly slam on the brakes, causing the victim to rear-end them. The scammers then file fake injury claims, even though they were not actually injured in the accident.

It's important to note that committing insurance fraud can have serious consequences. Not only can the insurance company deny your claim, but you may also be liable for the costs of the company's investigation and even face criminal charges.

To avoid being a victim of insurance fraud, it's crucial to recognize the signs of a scam and collect evidence to support your case. Some red flags include phony witnesses, unsolicited advice, and ambulance-chasing lawyers. Additionally, always call the police after an accident, record any statements made by the other driver, and take photographs and videos of the accident scene.

Lying about your address

False registration fraud is a specific type of address fraud. This is when someone registers their vehicle in an area with lower insurance premiums. This is common among people who live in more expensive areas. They will use the address of a family member or friend who lives in a cheaper area.

According to the Coalition Against Insurance Fraud, lying about your address is a form of "premium leakage". This type of fraud costs insurers $29 billion a year.

Abandoning your car

If you abandon your car and report it as stolen, you could face a misdemeanor conviction, which may result in a fine and probation, or even jail time, depending on your state. Felony conviction penalties also vary by state but may result in prison time and significant fines, depending on the circumstances and/or money involved.

It is important to note that insurance fraud is illegal and can lead to severe penalties, including jail time.

Filing multiple claims

Example Scenario 1:

• Be involved in a minor accident, such as a fender bender, and ensure there is some damage to your vehicle.
• Immediately after the accident, start planning your fraudulent claims. The key is to create multiple claims that appear to be unrelated to each other and the initial accident.
• Claim 1: Report that the damage to your bumper was caused by a hit-and-run accident that occurred a few days ago. Embellish the story by providing false details, such as the make and model of the other vehicle involved, and claim that you have witnesses who can corroborate your story.
• Claim 2: Invent an injury, such as whiplash or back pain, that you supposedly sustained during the accident. Provide false medical records and exaggerate the severity of your symptoms to increase the payout amount.
• Claim 3: If there was more than one person in your vehicle during the accident, have them file a separate claim for their own injuries, even if they are non-existent or exaggerated. Remember to coordinate your stories to avoid discrepancies.

Example Scenario 2:

• Stage a more serious accident, such as a side-swipe or a rear-end collision, by working with one or more accomplices. Ensure that there is significant damage to your vehicle and, optionally, fake some injuries.
• Claim 1: File a claim for the damage to your vehicle, exaggerating the extent of the damage and blaming it on the other driver. Provide false details about the accident, such as claiming that the other driver was speeding or ran a red light.
• Claim 2: If you have an accomplice, have them file a separate claim for their own fictional injuries sustained during the accident. They can also exaggerate their injuries to increase the payout amount.
• Claim 3: Invent additional damage to your vehicle that was not caused by the accident, such as a broken headlight or scratches on the other side of the car. File a separate claim for these damages and attribute them to a different, fictional accident that occurred on a different date.

General Instructions:

• Always be aware of the details of your insurance policy, including what is covered and the limits of your coverage. This will help you create more believable claims.
• Keep track of your claims and the details you provide to the insurance company. Consistency is key when dealing with multiple claims.
• Be cautious and do not file too many claims in a short period, as this may raise red flags. Space out your claims and vary the types of damage or injuries you claim.
• Remember that filing multiple claims can increase your insurance premium when your policy renews, so be strategic about the timing of your claims.
• If you have accomplices, ensure that they are trustworthy and will not divulge your scheme. Practice your stories together to maintain consistency.
• Be prepared to provide false evidence, such as fake medical records or fake witness testimonies, to support your claims if needed.
• Remember that filing multiple claims is a serious form of insurance fraud and carries the risk of severe penalties, including jail time and fines.

Frequently asked questions