Accident Fraud: Continuing Problem for Insurers

Aside from damages, if the victims were able to purchase appropriate insurance policies, they may also file claims with the company that will entitle them to receive compensation.

Injured victims in an automobile accident have the right to demand damages from the party liable for the expenses incurred due to the accident and injuries sustained. Aside from damages, if the victims were able to purchase appropriate insurance policies, they may also file claims with the company that will entitle them to receive compensation.

Fraudulent Compensation

With the huge amount of compensation victims of accidents – most notably auto accidents – can possibly recover, it’s no wonder some people resort to staging an auto accident and fake their way into receiving loads of money. Auto accident fraud has been a recurring problem for insurance providers for many years now.

Auto accident fraud normally happens when a person intentionally causes an accident that is made to look like the innocent victim's, or the other party’s, fault. Cases of car accident fraud cost insurers around $14 billion dollars annually. One-third of bodily injury insurance claims also involve some degree of fraud against the company.

Why File a Fraudulent Accident Claim?

The primary reason for committing such illegal conduct is to amass money from insurance companies for imaginary injuries or repairs. In bodily injury claims, back pain and whiplash are usually reasoned out because such injuries are hard to dispute medically.

Overstated Injury Records

Aside from the staged accident itself, fraud also occurs when medical professionals increase the cost of medical treatment for the injuries, or claim that a victim sustained injuries even if he did not. Auto body and repair shops also commit fraud if they charge for uncompleted work or replacement costs even if only a small part of the vehicle was repaired, or when the repair or replacement cost is inflated.

Common scenarios in a staged auto accident involve:

  • Swooping in front of the victim’s car and braking to cause a rear-end collision
  • Slowing down to let the victim’s car into traffic but crashing into it, making it the other driver’s fault
  • Sideswiping a victim who drift into the outer lane while turning

The deceitful party may not incur any damage, but the real victims in the fake accident can suffer physical, financial, and emotional damage. They may be seriously injured in the accident that may lead to disability or even death, or have a permanent accident record on their auto insurance resulting to increased premiums or dropped coverage.

The only way not to fall victims into such schemes is to prevent car accidents in general. Be careful on the road and follow rules. And in case of any road accidents, follow the necessary steps after an accident, such as reporting what happened to the authorities and choosing only the trusted medical provider and car repair shop.

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