Protect yourself from these common car insurance scams.
Spot the fraud
1. The Swoop-and-Squat
2. Waving You Through
3. Fake Injuries
4. Phantom Victims
5. Tow troubles
6. Bodyshop scams
7. Dubious extra damage
8. Padding the paperwork
9. Bogus treatment
10. Counterfeit Parts
11. Windshield replacement rip-off
12. Agent fraud
It can be a nasty world out there, with a lot of people trying to make a dishonest buck, and the multi-billion-dollar insurance business is a prime target. These criminals target innocent drivers, and that could include you. We have compiled some of the more common schemes, with tips on how to protect yourself from them.
In this scam, a driver pulls directly in front of you and then hits the brakes so you rear-end him. Sometimes two cars are involved: one rides in front of you for a bit, and then the second driver pulls the move on him. He brakes in time, but you do not. Now you both look like innocent victims, while the perpetrator drives away. Call the police whenever you suspect this fraud, even if the damage is minimal. If possible, call your insurance company at the scene and follow any instructions they give you. And never tailgate because doing so gives these guys the opportunity to scam you.
This scammer may be opposite you at a stop sign, or coming out of a driveway or side street as you are driving down the road. He has the right-of-way, but he waves at you to go ahead. When you do, he drives into you and then denies telling you to proceed. Never give up the right-of-way when it is yours. Even if it is someone who is simply trying to be polite, rather than a scammer, it can be confusing to other drivers and can be very dangerous.
You’ve been in a minor fender-bender—whether a staged collision or a genuine crash—but people in the other vehicle are complaining of injuries or calling for an ambulance. They are probably planning on hitting you up for a payout, so let your insurance company know. Make note of how many passengers were in the car (take a photo if possible), in case your insurer gets four injury claims when there were only two people in the other vehicle.
Sometimes it’s not the other people involved in the accident faking the injuries, it’s people who weren’t even there for the crash. Always make note of how many passengers were in the other car (take a photo if possible), in case your insurer gets four injury claims when there were only two people in the other vehicle.
A tow truck driver who arrives shortly after a collision might have picked it up on a police scanner, or could even be in on a staged crash. He will then offer to take your car to “a good bodyshop I know.” Do not let him. You will probably end up with a massive tow bill, and you could also be subsidizing a kickback he gets from the bodyshop. If you don’t know a company to call, ask your insurer, your auto club, or your roadside assistance. You may have to pay for the tow, but at least you won’t get scammed.
Bodyshops are often part of the con game. Sometimes they will be “recommended” by the other driver in the crash, by the tow truck driver, or even by someone who apparently was walking by and happened to notice the incident—yes, they can be in on it too. If you agree to send your car there, you may be overcharged for the repair, the work might be substandard, or both. Use a bodyshop approved by your insurance company.
When you are in a crash, use your phone to take photos of all sides of the other vehicle. It is not uncommon for scammers to bang in a few more dents afterwards to run up the bill, or for a bodyshop in on the con to charge for repairs they never performed. Send the photos to your insurance company so they can check them against the repair bills.
When your car is fixed—no matter who does it—check the bill when you pick up the car. Make sure you are not being charged for parts that were not put on, or for repairs to an area that wasn’t damaged. Also check to make sure they haven’t tagged on extras, such as a rental car you never used, or a towing bill that was already paid.
Are you hurt? Some insurance scams are actually run by organized crime rings, and believe it or not, health care clinics can be in on the action. If you are hurt, do not head off to a physiotherapy clinic that the other driver recommends. Even if you go to one you trust, keep a detailed list of your visits, including the days you went, how long you were there each time, and what was done. Your insurance company may need to verify this against the bills they receive for your treatment.
Airbags are expensive components that must be replaced if they deploy, so naturally, there’s a thriving criminal market for them. Stolen ones used to be the main issue, but now you also have to worry about getting a counterfeit one, made overseas and often bearing genuine-looking logos and markings. Help protect yourself by having your car repaired at a shop that is approved by your insurance company.
Windshields take a beating, and scam artists know it. You might be approached by someone in a parking lot or at a car wash who notes a couple of chips or pits and will replace your windshield “for free” if you provide your insurance information, often because he claims he’s absorbing your deductible. The scam can include shoddy work, an inflated bill to your insurance company, or several claims against your policy since they have all they need to know. If you do need new glass, contact your insurance company first, and then use a reputable installer.
It is rare, but there are people who will pose as insurance agents or brokers. These people may take a driver’s premium but keep the cash instead of applying it to the coverage or charge for additional benefits that are not added to the policy. You can take steps to avoid this scam by checking your agent or broker’s credentials and ensure the company they work for has a positive reputation. Also, you should always read over your paperwork when you receive it to be sure you’re only paying for what you want, and at each renewal, talk to your insurer to be sure you have the right coverage each time.