If you're in an accident and there's something a little odd about either the incident itself or what happens in the days and weeks following, you might be right to think that you—and your insurer—are being played.
According to the Insurance Information Institute (I.I.I.), staged accidents altogether cost both policyholders and insurers billions of dollars annually. They've been increasingly common, too, during the recession. And with every level of thief from organized crime syndicates to rogue street thugs and scam artists involved, insurance fraud can take many forms.
"Staged auto accidents are a dangerous criminal activity that targets innocent drivers with increasingly bold schemes aimed at defrauding insurance companies," said Loretta Worters, vice president of the I.I.I., in a release on the matter.
The III points to "no-fault" auto-insurance states as those in which staged accidents run most rampant. Among the twelve U.S. states with no-fault laws, Florida (and the Miami area in particular) leads in questionable claims potentially involving staged accidents, followed by New York, Michigan, and New Jersey.
According to the III, there are a few key warning signs that you're part of a staged accident:
- People who appear at the accident and direct you to (or insist that you use) particular attorneys or doctors
- Physicians who insist you file a personal injury claim even if you weren't hurt
- Tow trucks that arrive without any call
- After the accident, "padded" (inflated) claims and misrepresented facts
Staged accidents in general rose by 26 percent in 2010, versus 2009, while inflated auto-body or auto-repair claims rose 31 percent and auto-glass fraud rose a whopping 450 percent in a year.
Even if you're not sure what you've seen is insurance fraud, report your suspicion. That way it would be harder to inflate the claim by making damage more extensive—and if they are pulling a scam and do get away with it this time, they'll have more trouble next time.
If you're in an accident, take notes, take pictures, and record license-plate numbers and makes/models of vehicles, as well as names and badge numbers of officers and emergency personnel. And get names and addresses for everyone involved, and for witnesses.
Click over to the next page for four of the most common scenarios for staged accidents, from the National Insurance Crime Bureau (NICB):
Screenshot from YouTube video
Swoop and Squat
Usually involves three vehicles; two are driven by criminals, the other is the victim. The driver of the "squat" vehicle positions his vehicle in front of the victim's car. The driver of the "swoop vehicle" pulls ahead of the squat vehicle and internationally cuts it off, thus causing the squat vehicle driver to hit his breaks [sp]. The victim cannot react in time and rear ends the squat vehicle. The swoop vehicle races off and is not seen again. The innocent motorist states the swoop vehicle caused the accident, but because that driver cannot be located, the victim has to pay the vehicle damage and personal injury claims of passengers in the squat vehicle.
Typically occurs at busy intersections with dual left turn lanes. The criminal positions his vehicle in the outer lane. As soon as the victim's vehicle drifts into the outer turn lane, the criminal side-swipes it.
Here the criminal typically drives an older vehicle filled with passengers. The criminal positions his car in front of the victim's while a backseat passenger in the criminal's vehicle watches and waits for the innocent motorist to be distracted, for example, by a cellphone call. As soon as the victim is distracted, the driver slams on the brakes, causing the innocent motorist to rear-end the criminal's vehicle. The victim's insurance company must pay for vehicle damage as well as injuries that the passengers may claim to have suffered from the accident.
In this scheme, the victim merges his vehicle into traffic after being motioned to do so by the criminal. As the innocent driver begins to merge, the criminal speeds up and causes a collision. When questioned, the criminal denies motioning the victim to merge into traffic or gives excuses.