13 juin 23

Car insurance scams in U.S. and ways to avoid them

Car insurance premiums can jump by more than 50% following an accident so avoiding an incident is of utmost importance, not only to preserve the health and wellbeing of your drivers but to reduce fleet operational costs.

Although fleet managers can save lives and lower the total cost of ownership (TCO) of their cars and trucks by implementing driver training courses and acquiring vehicles with high safety ratings, the topic of this article is making sure your drivers are aware of the consequences of car insurance fraud.

These types of scams, which often go unnoticed, are costing United States billions of dollars every year. 

According to the FBI, non-health insurance fraud costs the average American family $400-$700 per year, a MarketWatch study said, so you can imagine how much a fleet operator of 1,000 vehicles or more could face.

Many car insurance scams are designed to simply take your money, while others, like staged accidents and fraudulent airbags, can put you directly in harm’s way. Basically, when a driver or a fleet operator is a victim of a car insurance scam, they are left with extra fees – if not injuries - while the scammer benefits. 

According to the study, one of the most common types of fraud is Staged Accidents in which a driver (sometimes with an accomplice) intentionally causes a collision to receive a fraudulent payout from an auto insurance company. Among them are: 

•    Turn Drive Downs: Driver is lured into making a turn (someone waving you down) and then a collision is set up. 

•    Wave Down: Driver is given a wave that it’s safe to pull out of a parking lot or side street. The victim is then hit by the second car.

•    Rear-End Collisions: Driver in front slams on their brakes, sometimes assisted by a second driver which pulls in front of them.

•    Extra Damage: Drivers who stage accidents cause extra damage to their vehicles after the collision.

•    Past Posting: Manipulating paperwork to make it look like uninsured motorists had coverage when an accident occurred. (common in Ohio)

Also look out for Repair Scams. Besides performing unnecessary services (phantom repairs), mechanics may use low-quality parts that lead to future repairs or even worse, cheap knockoff airbags which could be deadly. One scam (common in Florida) is Glass Fraud which involves a random inspection from a glass technician or unsolicited offer to repair glass in your vehicle.

Seeing a tow truck on the scene right after an accident or breakdown might not be a sign of good luck, the study said. There are shady towing services performing Towing Scams which take cars and essentially hold them hostage until you pay exorbitant fees. 

Finally, the study said that a more complex car insurance scam involves False Medical Claims as they require medical practitioners to get involved. In this case, scammers may forge medical bills, charge for unnecessary procedures, or even sue for pain and suffering. 

Scam avoidance tips

•    Do not tailgate!
•    Be wary of individuals offering unsolicited assistance.
•    Count the number of occupants in other vehicles 
•    Make sure you vet all possible repair shops 
•    Favor repair facilities recommended by your insurance company
•    Call for towing assistance yourself.

Finally, document everything at the scene of the accident. Take pictures of the damage with your cell phone, get names, insurance policy numbers, car descriptions, license plate numbers, a physical description of those involved (vocal characteristics for phone scams).

In the end, we like to think that most people are honest out there but there are some things you need to watch out for so keep on your toes. 

For more fleet management tips on a global scale, join Global Fleet during the next Global Fleet Managers Club meeting. Covering global fuel and energy management, it will take place on 28 September 2023 (online).

Photo: car accident (copyright: Shutterstock)

Authored by: Daniel Bland