Reporting Auto Insurance Fraud: Your Steps

Auto insurance fraud is a costly criminal activity that can take many forms, including staged accidents, false injury claims, and theft or burning of vehicles. It is essential to recognize and report auto insurance fraud to protect innocent consumers from bearing the financial burden of higher insurance premiums. If you suspect auto insurance fraud, there are several ways to report it. Many states have a fraud bureau or hotline for reporting insurance scams, and you can also contact the insurance company directly. Additionally, organizations such as the National Insurance Crime Bureau (NICB) and insurance companies like Nationwide have hotlines and email addresses dedicated to receiving reports of insurance fraud. By speaking up, you can play a crucial role in combating this prevalent issue.

Report to the California Department of Insurance

If you suspect auto insurance fraud in California, you can report it to the California Department of Insurance. This can be done by completing the Consumer Insurance Fraud Reporting Form and mailing it to the Department of Insurance Enforcement Branch Headquarters at the following address:

California Department of Insurance

Enforcement Branch Headquarters Intake Unit

2400 Del Paso Road

Suite 250

Sacramento, CA 95834

Alternatively, you can fill out the Online Insurance Reporting Form and mail it to the following address:

California Department of Insurance

Enforcement Branch Headquarters Intake Unit

9342 Tech Center Drive

Suite 100

Sacramento, CA 95826

The California Department of Insurance can also be contacted by phone at (916) 854-5760 or by fax at 916-854-5848. Their website can be found at www.insurance.ca.gov.

As noted in California Insurance Code section 1879.5, no person shall be subject to civil liability for filing a good faith report of suspected insurance fraud to the Department of Insurance. This means that individuals can safely report suspected fraud without fear of legal repercussions.

The Department of Insurance has developed a method for members of the general public to report cases of suspected insurance fraud. This includes auto insurance fraud, which can take many forms. For example, giving false information on an insurance application, inflating or exaggerating claims, making false claims of stolen or damaged property, staging accidents, or having someone steal or burn a vehicle to collect insurance money.

Contact the National Insurance Crime Bureau

If you suspect auto insurance fraud, you can contact the National Insurance Crime Bureau (NICB) in several ways. The NICB is a non-profit organisation that works with insurance companies and law enforcement to identify, detect, and prosecute insurance criminals.

Firstly, you can call the NICB hotline on 800.TEL.NICB (800.835.6422) from Monday to Friday, 7 a.m. to 7 p.m. CST. All calls can be anonymous. Secondly, you can report fraud online by filling out a form on the NICB website.

Additionally, you can contact your state's fraud bureau, as most states sponsor a fraud hotline or allow you to report insurance scams on their website. You can also directly contact the insurance company that is being defrauded. If they don't have a reporting system or fraud hotline, get in touch with their headquarters.

Recognise signs of fraud, such as staged accidents

Staged car accidents are a growing problem, with fraudsters employing various tactics to defraud innocent people and insurance companies. Here are some common signs of fraud to look out for:

Swoop and Squat

The "Swoop and Squat" scheme typically involves three vehicles, two driven by criminals and the third by the victim. The "swoop" car pulls ahead of the "squat" vehicle and cuts it off, causing the squat vehicle to brake suddenly. The victim, unable to react in time, then rear-ends the squat vehicle. The swoop vehicle speeds away, leaving the victim responsible for the accident. This scheme may also involve a fourth vehicle that boxes in the victim from the side, ensuring they cannot avoid the collision.

Panic Stop

The "Panic Stop" scam is similar to the Swoop and Squat scheme but usually involves only one other vehicle filled with passengers. The fraudster's vehicle gets in front of the victim and waits for them to become distracted. Once the victim takes their eyes off the road, the perpetrator suddenly slams on their brakes, causing a rear-end collision. In this scenario, the fraudster's vehicle often has non-functioning brake lights, and passengers act as witnesses to support the fraudster's claim.

Sideswipe

The "Sideswipe" scam occurs at busy intersections with multiple left turn lanes. As the victim's vehicle makes a turn, it drifts slightly into the adjacent lane, and the perpetrator takes this opportunity to rush and crash into the victim's car. The fraudster then claims innocence and submits an insurance claim. Alternatively, the perpetrator may drift into the victim's lane and sideswipe them, blaming the accident on the victim.

Start and Stop

The "Start and Stop" scam is usually staged in gridlocked traffic. The perpetrator's vehicle, placed in front of the victim, starts to move forward as if traffic is finally moving. As the victim follows, the fraudster slams on their brakes, causing a rear-end collision.

Wave-In

The "Wave-In" scam occurs when the victim wants to change lanes in heavy traffic. A fraudster waves the victim forward, but as the victim changes lanes, the perpetrator deliberately smashes into their car. When the police arrive, the fraudster denies having waved the victim forward, making the victim appear careless and at fault.

Drive Down

In this scam, the victim merges into traffic after being motioned to do so by the fraudster. As the victim begins to merge, the criminal speeds up and causes a collision. The perpetrator then denies having indicated for the victim to merge, placing blame on them.

Common Signs and Red Flags

• Fraudsters often target specific types of victims, including senior citizens, young women driving alone, luxury vehicles, work vehicles, and big rigs.
• Staged accidents occur more frequently in urban and wealthy areas where there is a higher volume of vehicles and better insurance coverage.
• Be cautious if you notice suspicious driving behaviour, such as a driver repeatedly circling in a roundabout or waving you on when they have the right of way.
• Watch out for vehicles with rubber tires or other objects inside, which are used to cushion the impact of the collision and exaggerate injury claims.
• Fraudsters may try to prevent you from changing lanes or take advantage of your distraction to cause an accident.
• Be wary of drivers who act strangely, have an excessive number of passengers, or look out of place.
• Fraudsters may pressure you to settle the matter on the spot without involving the police or insurance companies. They may also ask for your wallet to write down information, which you should never give them.

Report to your state's fraud bureau

If you suspect auto insurance fraud, you can report it to your state's fraud bureau. Most states sponsor a fraud hotline or allow you to report an insurance scam on their website. You can also check if your state has a fraud bureau that investigates insurance fraud.

For example, in California, you can report suspected insurance fraud to the California Department of Insurance. The department has an Enforcement Branch Headquarters Intake Unit, which can be contacted by mail, phone, or fax. The Coalition Against Insurance Fraud (CAIF) is another resource, offering a wealth of information for consumers on its website.

When reporting auto insurance fraud to your state's fraud bureau, be sure to provide as much detailed information as possible. This can include documentation such as police reports, accident scenes, witness statements, and any other relevant evidence. It is important to act promptly and provide accurate information to assist in the investigation and prosecution of insurance fraud.

Additionally, you can contact the National Insurance Crime Bureau (NICB), which is a non-profit organization that partners with insurance companies and law enforcement to identify, detect, and prosecute insurance criminals. The NICB can be reached by calling 800.TEL.NICB (800.835.6422) or by submitting a report online. Alternatively, you can reach out to your local FBI office, as insurance fraud is a federal crime.

Contact the insurance company directly

If you suspect auto insurance fraud, you can contact the insurance company directly. Most insurance companies have systems in place for reporting fraud, so you can start by contacting the company's fraud division or hotline. If the company doesn't have a dedicated fraud system, you can call or write to the company's headquarters. You may also be able to report the fraud via email.

When you contact the insurance company, be prepared to provide as much information as possible about the suspected fraud. This includes any relevant details, such as names, addresses, license plate numbers, and any other pertinent information that may assist in the investigation. It is also helpful to provide documentation or evidence supporting your suspicion of fraud. This can include photographs, police reports, or any other relevant documents.

It is important to note that you can choose to remain anonymous when reporting suspected fraud. Your state's fraud bureau and organizations like the National Insurance Crime Bureau (NICB) allow for anonymous tips and reports. The NICB can be reached at 800.TEL.NICB (800.835.6422) from Monday to Friday, 7 a.m. to 7 p.m. CST. Additionally, the California Department of Insurance also protects individuals reporting in good faith from civil liability.

By taking the step to contact the insurance company directly, you are playing a crucial role in combating auto insurance fraud and helping to protect consumers from the financial burden caused by fraudulent activities.

Frequently asked questions