Unfortunate Prevalence of Auto Insurance Scams: Their Impact on Insurance Premiums in States like Florida and New York. The far-reaching extent of this issue places an estimated $40 billion annual burden on the insurance industry, causing the average U.S. family to bear an additional $700 in yearly expenses due to heightened insurance rates and premiums. As fraudsters continually evolve and devise new schemes to exploit drivers, it’s paramount to remain well-informed about the latest trends. In this context, we delve into some of the most common car insurance scams of 2023 and explore how the installation of a dashcam in your vehicle serves as a reliable solution to avoid falling victim to these fraudulent activities.
Scam #1: Staged accidents
How the scam works:This scam involves deliberate actions by fraudsters to orchestrate accidents, allowing them to make false claims for injuries or damages. These staged accidents may encompass tactics such as sudden hard braking (commonly referred to as ‘panic stops’) and the ‘wave-and-hit’ maneuver. As reported by the National Insurance Crime Bureau, staged accidents tend to transpire more frequently in urban areas. They are particularly directed at wealthier neighborhoods and often involve newer, rental, and commercial vehicles, where there is an assumption of more comprehensive insurance coverage.
How to stay safe: The most effective method of safeguarding yourself against staged car accidents is by installing a dash cam. Opt for a dash cam with Full HD resolution or higher, boasting a wide field of view, to ensure the clear and comprehensive capture of dash cam footage. While a single-front-facing camera can be beneficial, multiple cameras offer even broader coverage. Therefore, a dual-channel system surpasses a single-camera setup. For complete and thorough coverage, consider a 3-channel system like the Aoedi AD890. This system includes an interior camera with swiveling capabilities, enabling it to capture incidents and interactions on the driver’s side. So, even in situations where the other driver approaches you or the driver’s side window with hostile intentions or statements, the Aoedi AD890 has your back.
Scam #2: Jump-in passenger
How the scam works:This deceptive scheme involves a dishonest passenger infiltrating the vehicle of the other driver who was part of an accident. They falsely assert injuries, despite not being present in the vehicle during the time of the accident.
How to stay safe: When there are no law enforcement officers or witnesses present, you might find yourself in a ‘he said, she said’ situation. In such cases, it’s vital to gather accurate information at the accident scene. Utilize your smartphone to take photographs. If feasible, collect the names and contact details of all parties involved, including any eyewitnesses at the accident location. You may also consider reaching out to the police and requesting the filing of an official report. This report, along with its unique file number, can be invaluable for your case. Additionally, it’s advisable to search the vicinity for security cameras that could have captured the accident from alternative angles.
Scam #3: Bandit tow truck
How the scam works 
redatory tow truck operators often lurk, ready to exploit drivers who have experienced an accident. They extend offers to tow your vehicle but then present you with an exorbitant bill. In the aftermath of the accident, when you might be shaken and disoriented, you may unwittingly consent to having your vehicle towed to a repair shop that the tow truck driver recommends. Unknown to you, the repair shop compensates the tow truck driver for bringing in your vehicle. Subsequently, the repair shop may engage in overcharging for services and even invent necessary repairs, ultimately driving up the costs incurred by both you and your insurance provider.
How to stay safe:If you own the Aoedi AD360 dash cam, it’s a smart move to direct your dash cam’s lens toward the tow truck driver, ensuring that you capture video evidence of any conversations that transpire. And remember not to power down your dash cam just because your vehicle is securely loaded onto the tow truck. Keep the dash cam recording, as it can document any events or incidents that may occur with your car while you’re separated from it, providing you with valuable video footage.
Scam #4: Exaggerated injuries and damage
How the scam works: This fraudulent scheme revolves around the exaggeration of vehicle damages following an accident, with the intention of securing a larger settlement from the insurance company. Perpetrators may also fabricate injuries that are not immediately apparent, such as whiplash or concealed internal injuries.
How to stay safe: Regrettably, guarding against inflated injury claims can be a challenging task. Nevertheless, you can still gather precise information at the accident scene and use your phone to capture images. If there are concerns that the other party has sustained injuries, it’s advisable to prioritize safety and call the police for prompt emergency medical assistance.
Scam #5: Fraudulent car repairs
How the scam works:This deceitful scheme revolves around repair shops inflating costs for repairs that may be unnecessary or fictitious. Some unscrupulous mechanics take advantage of individuals who are less knowledgeable about the inner workings of a car. Overcharging for repairs occurs in various forms, including the use of pre-owned or counterfeit parts instead of new ones, as well as fraudulent billing practices. In certain cases, repair shops may bill insurance companies for brand new parts while installing used ones, or they may invoice for work that was never actually conducted. One classic instance of a car repair insurance scam is the airbag repair fraud.
How to stay safe:
The most effective approach to steer clear of this scam is to select a reputable repair facility. Request references, and upon completion of repairs, ensure that you inspect your vehicle thoroughly when picking it up.
Are there any group of drivers that are targeted more often for car insurance scams?
Car insurance scams can impact a wide range of individuals, but specific demographics might be at a higher risk due to their limited knowledge or experience with the insurance system. Among these more vulnerable groups are:
- Elderly individuals: Older adults may face a heightened risk of falling victim to scams, primarily because they may not be as well-versed in contemporary technology or might exhibit a higher level of trust in individuals who convey expertise or professionalism.
- Immigrants: Immigrants could face an elevated risk of being targeted, often stemming from their unfamiliarity with the insurance system in their new country. Additionally, they may place more trust in individuals who share their cultural or community background.
- New drivers: Inexperienced drivers may lack the knowledge to identify insurance scams, particularly because they have limited exposure to the insurance system.
It’s essential to emphasize that car insurance scams can affect anyone, irrespective of their age, income, or level of experience. Staying well-informed and taking proactive measures to safeguard oneself remains the best defense against falling victim to such scams.
How do you report car insurance fraud?
If you suspect you’ve fallen victim to car insurance fraud, taking the following steps is crucial:
- Contact your insurance company: If you have concerns about insurance fraud, your first action should be to get in touch with your insurance provider. They will offer guidance on how to report the fraud and advise on the subsequent course of action.
- Report the fraud to the National Insurance Crime Bureau (NICB): The NICB, a nonprofit organization dedicated to uncovering and preventing insurance fraud, is an invaluable resource. You can report car insurance fraud to the NICB through their hotline at 1-800-TEL-NICB (1-800-835-6422) or by visiting their website at www.nicb.org.
- Notify your state’s insurance department: Each state maintains an insurance department responsible for regulating insurance companies and conducting investigations into insurance fraud. You can access the contact information for your state’s insurance department by visiting the National Association of Insurance Commissioners (NAIC) website at www.naic.org.
Reporting car insurance fraud to the appropriate authorities is essential not only for your own protection but also to prevent others from falling prey to similar scams. Your report can aid in bringing those responsible to justice and serve as a deterrent against future fraud.
Can a dash cam help fight car insurance fraud?
Yes, indeed, it can!
Employing a dash cam can serve as a robust defense against these scams, as it offers impartial evidence of the incident in question. The footage recorded by the dash cam can effectively disprove unfounded claims and supply compelling video proof to bolster your case. Dash cameras capture views from a vehicle’s front, rear, or interior, enabling the establishment of key facts such as vehicle speeds, driver actions, and prevailing road and weather conditions at the accident’s moment. These crucial details play a pivotal role in thwarting potential car insurance fraud and safeguarding you from falling victim to such schemes.
Do you have to tell your insurance you have a dash cam?
While it’s not mandatory to inform your insurance company about a dash cam, it’s a wise move to consult with them to ascertain if they have any particular guidelines or if the recorded footage could prove valuable in claim resolution.
Should you decide to utilize a dash cam and become involved in an accident, you may discover that the captured footage proves instrumental in resolving the claim and establishing fault. In such instances, you may opt to proactively share the footage with your insurance provider for their consideration.
Post time: Nov-08-2023