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Car Insurance Scams

By: Anna Martin - Updated: 10 Sep 2012 | comments*Discuss
Car Insurance Premium Accident Repair

As with any kind of scam it is likely to be a costly experience for you. Although most insurance scams are aimed at insurance companies it will be you, and not the insurance provider, who ends up picking up the expensive bill. Insurance companies spend a huge amount of money, each year, defending against misleading car insurance claims. Improper payments or claims result in all policyholders having to pay inflated premiums to cover the cost of these huge losses.

Car Insurance Scams to Watch Out For:

  • Watch out for perpetrators who create an accident in order to stake an insurance claim. This could involve a number of driving accidents – collision, traffic merge accident, fictitious hit-and-run.
  • A vehicle repair company may offer a tow truck driver a fee if he tows damaged vehicles to their workshop. The tow truck driver should not recommend a particular repair shop unless asked.
  • A legal representative may offer a tow truck driver a fee in exchange for accident victim referrals. This practice is illegal.
  • A legal representative may be offered a fee, by a health care provider, in exchange for accident victim referrals.
  • These referrals may be padded out and you may find yourself being presented with an expensive bill for services you had no choice in selecting.
  • Claiming money to fix damage to a car will not net a scammer a huge amount. However claiming for physical pain caused by an accident will soon bump the amount up.
  • Be suspicious of any helpful passer-by who is only too willing to recommend a repair shop, or similar.

How to Stop This Happening to You:

Be informed at all times.

Check any service provider you may require is affiliated with a reputable company. For instance, does the tow truck driver belong to an automobile association or roadside assistance group?

Carefully read anything you are given to sign.

Are you recommended a particular repair facility without asking for a recommendation?

Contact your insurance provider and request information about vehicle repair companies they might recommend. Insurance companies often have a preferred vehicle repair shop. The insurance company will be familiar with the level of service and standard of repair available at this outlet.

What to Do:

If you suspect any fraudulent activity it is important to report the incident to your insurance company. You might also wish to contact the police.

Consider keeping a disposable camera, notebook and pen in your car, in case you are involved in an accident. This can provide your insurance company with valuable information. Ensure you take as many pictures as possible, including images of other vehicles that may not have been involved but are near the scene. This provides you with more information, if you suspect the accident may have been staged.

If you are involved in an accident, exchange information with the driver. Make a note of any other people travelling in the vehicle, and ask them for their names and address details. Also get the names and addresses of any witnesses to the accident.

Be Informed.

Many Car Insurance scams are performed by professional scammers, who are highly skilled at what they do. Being able to spot such a person may be difficult, although keeping your wits about you will enable you to notice any suspicious behaviour.
Insuring you are informed at all times will help to eliminate these scams, and will also help to keep insurance premiums low.

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