It’s bad enough that there are bad guys out there pulling off insurance fraud. What adds insult to injury is that the good guys end up footing the bill. The Insurance Information Institute estimates that property/casualty insurance fraud costs the industry about $32 billion a year. They don’t eat those losses. They pass them along to you. According to a National Insurance Crime Bureau, auto insurance scams alone cost you about $200 to $300 per year in additional premiums, and in the case of fake repairs, can endanger lives. Here’s what to be on the lookout for.
- Swoop and Squat. A car pulls in front of you, a second car pulls alongside you so you can’t change lanes, and the first car slams on his brakes and you rear-end him.
- The Wave In. You need to change lanes in heavy traffic. A nice young man waves you in, then accelerates before you can make the switch. The accident looks like negligence on your part and don’t be surprised if that nice young man has an injury that requires him to go to his very own special doctor, who will inflate the medical charges to your insurer.
- The Start and Stop. The driver in front of you slams on his brakes for no apparent reason. You slam into his rear end. He has whiplash and, once again, goes to his doctor buddy.
Those are just three very popular frauds. You can be pretty certain you’ve been scammed in one of these or the many other staged accidents if a tow truck you didn’t call appears within moments of the wreck or a seemingly innocent bystander who witnesses the accident offers to help by referring you to a great lawyer, doctor or repair shop.
And speaking of repair shops, while the vast majority run honest businesses, there are still a few crooked operators out there who aren’t above defrauding you with car insurance scams like these:
- Bogus Airbag Installation. Your airbag deploys and you take it to Shady Joe’s Auto Body where instead of giving you a nice new airbag, they fill the cavity with old rags, then turn around and charge your insurance company full pop.
- Shady Joe’s Auto Body isn’t above using used parts and billing your insurance company for new ones, or just adding repairs to the bill that were never done. Avoid Shady Joe’s and use a reputable shop, ideally one that’s part of your insurer’s direct repair network.
Find out how you can save money by shopping for car insurance online and comparing quotes.