Reporting Auto Body Insurance Fraud: What You Need To Know

Auto body insurance fraud is a serious issue that affects millions of people and costs consumers millions of dollars in increased premiums and higher prices for goods and services. It is important to be aware of the different types of auto body insurance fraud and to know how to report it if you suspect it is happening. Auto body repair shops may engage in fraudulent activities such as inflating damage estimates, using salvaged or stolen parts, and charging for services that were not performed. Tow truck drivers may also be involved in scams, such as charging for unnecessary services or bringing vehicles to dishonest repair facilities. If you suspect auto body insurance fraud, you can report it to organizations such as the National Insurance Crime Bureau (NICB) or the Insurance Bureau of Canada (IBC), or by contacting your insurance company directly.

Be aware of inflated damage estimates

Inflated damage estimates are a common tactic used by dishonest auto body repair shops to defraud insurance companies and customers. This involves deliberately overestimating the cost of repairs by adding unnecessary parts, materials, and labour to the bill. Less credible shops take advantage of customers' lack of knowledge about cost breakdowns and their urgency to get their vehicles repaired.

To inflate estimates, dishonest shops may exaggerate the extent of the damage to the vehicle, or they may include charges for work that will never be done or parts that will never be installed. In some cases, shops have been known to deliberately damage vehicles to justify higher repair charges.

In addition to padding the repair bill, these shops may also offer to "bury the deductible" by hiding the cost within the estimate, so the insurance company ends up paying the full amount. As a result, the insurance company is charged top dollar, while the customer often receives inferior or used parts.

To protect yourself from inflated damage estimates, it is important to be vigilant and only use legitimate, reputable auto body repair shops. Get recommendations from your insurance company, family, or friends, and always request a written damage report and estimate before any work is initiated. Review the estimate carefully and question any procedures that seem out of the ordinary.

By being aware of these tactics and taking proactive measures, you can help prevent insurance fraud and ensure you receive honest and reliable repairs.

Watch out for dishonest repair shops

When it comes to auto body insurance fraud, dishonest repair shops are a key contributor to the problem. It's important to be vigilant and watch out for warning signs of dishonesty to avoid becoming a victim of fraud. Here are some detailed instructions to help you protect yourself:

Be Wary of Uninvited Solicitations:

• Be cautious of unsolicited offers or visits from repair technicians, especially at the scene of an accident. Dishonest tow truck drivers may try to persuade you to use their services and transport your vehicle to a dishonest repair facility. These drivers often charge excessive fees and collaborate with unscrupulous repair shops.
• Be wary of glass repair technicians who randomly offer to inspect your windshield or other vehicle glass. This could be the first step in a fraud scam.

Recognize Inflated Estimates and Costs:

• Dishonest repair shops may provide damage estimates that are abnormally high or include unnecessary services, parts, or labor charges. They take advantage of customers who may not be familiar with cost breakdowns or are in a hurry to get their vehicle repaired.
• Review estimates thoroughly and question any procedures that seem unnecessary or out of the ordinary. Be on the lookout for services that were never completed or parts that were not installed as charged.
• Be cautious of repair shops that offer to "bury the deductible" by hiding the cost within the repair expenses. While this may seem like a tempting way to reduce costs, it often leads to insurance companies being charged full price for parts while you receive inferior or used replacement parts.

Understand Airbag Replacement Scams:

• Fraudulent repair shops may try to replace deployed airbags with stolen, used, or salvaged airbags, which they obtain for a low cost. They then charge the insurance company for the retail value of a new airbag.
• Some shops may even attach a deployed airbag to the steering wheel to create the illusion of deployment, allowing them to increase the insurance claim amount.
• To avoid airbag scams, always insist on examining packaged replacement airbags or requesting invoices from reputable airbag manufacturers. Scrutinize estimates for airbag replacements and be vigilant for any suspicious or incorrect charges.

Select a Reputable Repair Shop:

• Choose a repair shop that is professional, well-organized, and accredited. Look for shops with ASE (Automotive Service Excellence) certification, which ensures technicians are trained and qualified.
• Get recommendations from your insurance company, family, or friends. Select a shop with positive reviews and a good reputation.
• Ensure the shop uses a written damage report instead of a simple cost estimate. A damage report provides a detailed "blueprint" of the repairs needed and helps prevent inflated charges.
• Ask for a written warranty on installed parts and paint work. This will protect you in case of future issues.

Be Aware of Common Repair Scams:

• Be cautious of mechanics who use scare tactics or condescending behavior to pressure you into repairs. A reputable mechanic will explain your options clearly and respectfully.
• Watch out for upsells and urgent repair recommendations. Dishonest shops may claim you need additional work, such as oil changes, fluid flushes, or brake replacements, when it's not actually necessary.
• Be wary of extremely low or high estimates. Very low estimates may be a tactic to lure you in for additional repairs later, while extremely high estimates could indicate overcharging or unnecessary services.
• Always request evidence of any faulty or damaged parts. Ask for photos, videos, or the actual part if it can't be shown to you in person.
• Ensure the mechanic explains the repair process and any issues in layman's terms. If they can't provide a clear explanation, consider getting a second opinion.

Know your rights when getting your vehicle repaired

Knowing your rights when getting your vehicle repaired is essential to protect yourself from auto body insurance fraud. Here are some key points to keep in mind:

Estimates and Quotes

Get at least two written quotes or estimates for any repairs or services. While estimates are often verbal and approximate, quotes are more specific and itemised. Make sure to review the estimate or quote carefully and question any procedures that seem unusual or unnecessary. Be cautious if a shop offers to "bury the deductible" by hiding the cost within the repair estimate, as this is a common scam to inflate the insurance claim.

Authorising Repairs

Authorise all repairs in writing before they are carried out. Be clear and specific when explaining the issues with your vehicle to ensure the repairer understands the scope of work required. Ask for specific repairs rather than diagnosing the problem yourself, as you cannot hold the repairer liable if a self-diagnosis turns out to be incorrect.

Parts and Labour

Ensure that the repairer uses parts that correspond to any description given and are of satisfactory quality. The repairs should be carried out with reasonable care, skill, and within a reasonable time frame. Ask for an itemised account of the work done, including any warranties, and keep a receipt with your car records.

Dealing with Issues

If you are unhappy with the repairs, try to resolve the issue with the original repairing garage, as legal procedures can be complex and time-consuming. Give them the opportunity to rectify any mistakes or faults at no additional cost to you. If you need to take your car to another garage to fix the issues, notify the original repairer in writing and provide several quotes along with expert evidence to support your claim.

Choosing a Reputable Repairer

Select a reputable and trustworthy repairer who is qualified to do the job and has access to the necessary equipment. A well-organised and professional shop with updated equipment is more likely to provide honest service. You can ask your insurance company or family and friends for recommendations. Reading online reviews can also provide insights into other customers' experiences.

Contact the National Insurance Crime Bureau if you suspect fraud

If you suspect insurance fraud, you can contact the National Insurance Crime Bureau (NICB) to report your concerns. The NICB is a non-profit organisation dedicated to preventing and deterring insurance fraud and crime. They investigate crimes against coverage such as auto, home, liability, and workers' compensation insurance.

You can contact the NICB by calling 800.TEL.NICB (800.835.6422). Their phone lines are open Monday through Friday, from 7 a.m. to 7 p.m. CST. You can also submit a report online through their website. All tips can be made anonymously.

When reporting suspected fraud, it is helpful to include as many details as possible. This includes dates, names, contact information, and any insurance companies that were involved. It is also important to provide information on the suspected scam, such as the specific tactics used to deceive customers or inflate costs. Additionally, if you have any records or evidence related to the suspected fraud, be sure to include that as well.

The NICB works in partnership with insurance companies, consumers, and law enforcement to combat insurance fraud and theft. They utilise intelligence, analytics, investigations, and learning development to address these issues. By reporting suspected fraud to the NICB, you can play a role in lowering the high costs that we all pay for insurance fraud.

Report fraud to the Department of Financial Services

Auto body insurance fraud is a crime that can take many forms. It can involve a driver and a body shop worker agreeing to inflate an auto damage claim and share the profit, or a body shop charging for new parts but installing used parts. It can also include airbag fraud, where a deployed airbag is replaced with a used or stolen one, or the vehicle's damage estimate is inflated.

If you suspect auto body insurance fraud, you can report it to the Department of Financial Services (DFS). The DFS handles insurance fraud complaints and keeps the matter confidential. Here are the steps to report fraud to the DFS:

• By Phone: Call the Insurance Fraud Hotline at (888) FRAUDNY or (888) 372-8369.
• Online: Use the Report Insurance Fraud submission form on the DFS website to report suspected fraud.
• By Mail: Print and complete the Report Fraud Form available on the DFS website. Mail the form to:
• New York State Department of Financial Services
• Insurance Frauds Bureau
• One State Street, New York, NY 10004
• By Fax: Print and complete the Report Fraud Form and fax it to (212) 709-3555.

In addition to reporting to the DFS, you can also contact the National Insurance Crime Bureau (NICB) by calling 800.TEL.NICB (800.835.6422) or submitting a form online. The NICB is a non-profit organization that works with insurance companies and law enforcement to identify, detect, and prosecute insurance criminals.

Remember, insurance fraud is a serious issue that impacts all residents of a state, leading to increased premiums and higher prices for goods and services. By reporting suspected fraud, you can help protect yourself and others from becoming victims.

Frequently asked questions