Four Common Auto Insurance Scams

Get wise to those out to get you.
by Josh Sadlier
No matter which way you slice it, an auto accident is a real pain. Throw in some insurance fraud by the other driver, though, and the phrase "adding insult to injury" has never been so apt. It would be nice if we could trust our fellow drivers to behave responsibly, but here's the unfortunate reality: there are plenty of con artists looking to make a quick buck. Estimates vary, but it's safe to say that auto insurance scams cost Americans billions of dollars each year in both fraudulent claims and higher monthly premiums.
You can't stop the scammers from trying, of course, but you can get wise to their tactics. That's why we've put together this list of four common auto insurance scams, with a recommended course of action in each case. If you keep your wits about you and remember how to handle these dirty tricks, you'll have a fighting chance of getting through it with your dignity -- and wallet -- intact.

The Fake Rear-End Collision

Scam: The driver in front of you tries to bait you into a rear-end collision, either by stopping much shorter than expected or braking hard at the last instant. Generally, the blame for a rear-end collision is assigned to the car in back, so this can be an easy open-and-shut case for the scammer when your insurance company gets involved.
Solution: Follow at a safe distance! Every day we see drivers riding the bumpers in front of them, oblivious or indifferent to the fraud opportunities they're creating. Getting that close won't get you to your destination any quicker. Also, don't just watch the taillights of the car immediately ahead; when possible, take a broader view forward, and prepare to hit the brakes whenever you see brake lights off in the distance. Of course, all of this goes out the window if you're playing with your phone, which is why the Fake Rear-End Collision is an especially effective scam in this day and age.  

The Make-Believe Victim

Scam: In the post-accident paperwork, the other driver claims there was another person in the car who sustained injuries. You don't remember seeing this additional person, but it's your word against the other driver's, and people's memories are notoriously unreliable in traumatic situations. This scam can work if the Make-Believe Victim's injuries are consistent with the accident details.
Solution: First of all, make note of the number of occupants in the other car at the scene, and try to get the occupants' names as well. Then, if you're at all suspicious about the circumstances, politely but firmly insist on taking photos of the occupants, making sure to capture the whole area so that the other driver can't claim the Make-Believe Victim was standing off to the side. If police respond to the scene, verify that the police report specifies the number of people involved--and if they don't respond, file your own police report.

The Gesture-and-Smash

Scam: You're turning onto a busy street. An oncoming car slows, and the driver gestures for you to pull out in front. You wave your thanks and accelerate, but just as you pull onto the street, the other driver accelerates and broadsides you, explaining later, "I wasn't gesturing to you -- you cut me off!"
Solution: It may sound obvious, but keep in mind that when a fellow motorist gestures for you to do something, you are under no obligation to comply. Assess the situation, and if the friendly gesture seems fishy in any way, politely gesture back that you'll wait.

The Magically Multiplying Damage Report

Scam: Suppose that the impact takes out the other driver's door, but when you get word later about the damage report, it's not just the door; the front fender got hit, too, and the roof pillar got bumped. Big money, in other words. In this scenario, the scammer either reports pre-existing damage as new damage, or goes home after the accident and causes new damage in order to get more comprehensive repairs from your insurance company.
Solution: Take 360-degree photos of both cars at the scene, sparing no detail. Note the precise location of the impact. If you see pre-existing damage, take detailed photos of that, too. For anything beyond a scratch or two, we recommend filing a police report, because a filed report of minimal apparent damage will make it a lot harder for the other driver to pull this scam off.

The Bottom Line

You may have detected a common thread here, and it's not exactly uplifting. Basically, we're advising that you shouldn't put a whole lot of faith in other drivers. But don't let that get you down about the state of humanity, because the truth is, most drivers are exactly like you: careful, considerate, and focused on doing the right thing. We just don't want the bad guys to win, so we encourage you to take every precaution against insurance fraud when you're behind the wheel. 

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