Car Insurance Fraud in California

Friday, September 2, 2011

The State of California has experienced a recent spike in fraud cases when it comes to auto accidents reported by insurers. Many experts say the primary reason for the sudden increase is related to the downturn in the economy. More people are out of work, trying to make ends meet, and unfortunately, many have turned to unscrupulous practices in order to hold on to the little bit of money that they still have. There was a drastic increase in auto arsons and suspected fraud auto thefts reported in 2009 and the numbers have continued to rise in recent years.

Suspected cases of fraud have been reported by auto insurers all throughout California from auto insurance Sacramento carriers to car insurance Los Angeles companies. As a result, it can become even more expensive to insure a car in California without doing your research and partnering with a stable provider. Many of the cheapest insurance carriers around have been forced to increase their rates. Thankfully, here at Cheap Insurance, we have been able to maintain cheap car insurance rates for our customers.

The problem of fraudulent claims is costing insurers, nationwide, an estimated $80 million per year. There are a number of scams that have surfaced, as a result of dishonest individuals looking to reap financial benefits through fraudulent auto claims. These activities often end up compromising the safety of innocent people as well as hiking up their insurance rates. Believe it or not, there are even organized crime rings that stage auto accidents in order to file false claims!

Below are some of the most common scams to be aware of:

  • Wave and Crash
    An innocent driver is attempting to merge into oncoming traffic, when the con artist slows down and waves the driver forward. The con artist then crashes into the victim’s car and denies ever waving them on into traffic, thus blaming the innocent driver for the accident. This is also a common ploy in parking lots.
  • Helpful Stranger
    A seemingly helpful stranger approaches a victim at a crash site, and recommends they call either a lawyer or an auto body shop regarding the accident. The accident could be real or staged but the businesses they have their victims call are unscrupulous. They may recommend an auto body shop that conducts illegal practices of padding auto repair costs. Alternatively, they may suggest a lawyer that will have the victim sue for injuries they did not incur.
  • Swoop and Squat
    The con artist suddenly drives in front of its victim then slams on the brakes, causing a rear-end collision. The con artist will then pretend to be injured in the crash, even if the collision was at a very low speed. They will then file a large collision and injury claim against the innocent driver’s auto policy.

There are many ways drivers can protect themselves from these scams. It is important not to tailgate another driver in the event the driver stops short. Drivers should also keep a disposable camera in their car if they do not have camera capabilities on their cell phone. From an overall standpoint though, it is always important to remain vigilant whenever operating a motor vehicle.

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