Keep an Eye Out for these Auto Insurance Scams
1. Counterfeit Air Bags
Jim Quiggle, a spokesman for the Coalition Against Insurance Fraud in Washington, D.C., says this in reference to repairing deployed airbags after car crashes: “Crooked repair shops frequently replace the bags with cheap knockoffs, or in some cases just fill the area with junk and garbage. The insurer pays for phony work, and the driver ends up with a car that isn’t safe.”
To ensure this doesn’t happen to you or a customer, recommend visiting a reputable mechanic that is provided by the insurance company, get a vehicle report when buying a used or salvaged car, and take notice of the air bag light that flashes briefly when the car has been started.
2. Staged Accidents
The National Insurance Crime Bureau reports an alarming 102% increase in suspected cases of staged accidents between the years of 2008 to 2011.
Some common types of staged accidents:
“Swoop and squat”: Two vehicles trap a victim in a rear-end collision.
“Drive Down”: The victim is waiting to make a left turn but is tricked into turning early by an oncoming driver. The driver waits at first and then advances to collide with the victim.
“Wave Down”: Two drivers orchestrate a crash with a victim who’s given the ok to pull out of a lot or side street.
“Enhanced Damages”: After a genuine crash, the driver who is not at fault fabricates additional damage to his or her own vehicle to collect a higher payout from the claim.
3. Windshield Replacement Scams
Consumers are being approached in parking lots by people claiming to be with a windshield repair or vehicle glass company. They are telling consumers that their vehicle’s windshield needs to be replaced, and it will be at no cost after the consumer provides their insurance information.
Sure, they are getting a new windshield, which is most likely in worse shape than the one that “needed to be replaced”. Also, this has opened up the opportunity for this scammer to submit false claims to the given insurance company.
4. Towing Scams
Authorities are telling consumers to watch out for “bandit” tow trucks, in reference to the tow trucks that just luckily show up after the car has been damaged in an accident or breaks down without being called first. Consumers are coming home with outrageous bills.
Be sure to let your consumers know if you offer roadside assistance with their specific policy, and the consumer should inquire about the policy’s limits in regards to towing, storage fees, etc. before leaving the scene.
5. Auto Premium Evasion
Whether customers purposely use a false address from a lower-premium area when registering their vehicles or purposely fail to add the new teenage driver to the family policy, this is costing the auto insurance industry an average of $16 billion a year, according to The Insurance Information Institute.