Though insurance fraud schemes typically aim to secure illegitimate payouts from an insurer, it’s likely that uninvolved, innocent individuals may also be victimized in the process. Some types of auto insurance fraud may not only cast doubt onto upstanding drivers, they may also result in serious injury. It’s important to be savvy so that you can recognize fraud when it occurs and do what you can to protect yourself.
Auto Insurance fraud can be broadly categorized into two categories: hard and soft fraud. Hard insurance fraud occurs when an accident, injury, or other incidental damage is completely faked with the purpose of collecting money from an insurance company. Soft fraud is more subtle, and may simply involve the overstatement or misconstruing of legitimate damages.
Hard Insurance Fraud
The most common way people become unwittingly entangled in an insurance fraud case is by being involved in a staged accident. States with “no fault” insurance laws allow individuals to collect from their insurer regardless of who was at fault in the accident. Though this policy may benefit honest drivers, it can also provide a loophole for bad actors. Here are three common types of schemes to watch out for in any state:
The Swoop and Squat
This scheme involves at least two vehicles driven by criminals. The first car will pull in front of the victim, while the second pulls alongside the mark’s car to prevent them from changing lanes. The car in front will then suddenly hit the brakes, causing the victim to ram into the rear. This car will typically have multiple passengers who can all claim injuries.
The Side Swipe
Watch out for this type of staged accident at busy intersections with double left turn lanes. The criminal will position their vehicle in the outer lane, ready to intentionally sideswipe the victim as soon as the victim’s car veers into the outer lane.
The Drive Down
This deceitful scheme can occur when you’re making a routine merge into traffic. The criminal will signal to the victim that the merge is ok, then speed ahead to hit the victim’s car anyway. When questioned after the accident, the criminal will completely deny motioning to the victim.
Soft Insurance Fraud
Soft insurance fraud takes many forms, all of which center misrepresentation of facts over than outright fabrication. While it may not seem like a big deal to slightly amend the facts of your case, soft fraud can still result in serious consequences for offenders. It’s important to be as specific and truthful as possible when making your claim so that you avoid treading into this more subtle area of fraud. Here are some examples of soft fraud:
Someone who was involved in a very real accident can still commit insurance fraud. Exaggerating the damage to yourself or your vehicle for the purposes of securing greater payouts from your insurance (or the other party’s insurance) falls under the distinction of soft fraud. Insurance is there to help make you whole following an incident—not more than whole.
Acquiring Insurance After the Fact
If an uninsured driver has an accident on Monday, it is an act of soft fraud to acquire insurance on Tuesday for the purpose of filing a claim. Most states legally require a demonstration of financial responsibility for potential accidents in the form of insurance. It’s better to acquire insurance before an accident happens, which Accurate Insurance makes easy and affordable.
Consequences and Penalties
Depending on your case and where you live, the consequences for both hard and soft fraud may carry legal and financial penalties. Soft fraud is most commonly categorized as a misdemeanor. A soft fraud case may result in jail time, fines, community service, and probation. The toll is even greater for hard fraud, which is made worse by any actual injuries that were caused, and is likely to be addressed as a felony. Strict penalties and potentially years of incarceration await those who attempt or commit hard auto insurance fraud.
Reporting Auto Insurance Fraud
Have you been a victim of auto insurance fraud? We recommend reaching out to the National Insurance Crime Bureau at their website (www.nicb.org) or by phoning in at 1-800-835-6422. All tips to the NICB can be reported anonymously. If you have information about a false claim that you believe has been filed with Accurate Auto Insurance, we ask that you please contact us immediately with that information.
Affordable Auto Insurance is Available
Know that affordable auto insurance is a possibility, even for individuals who have received DUIs, past tickets, or have previously been involved in serious accidents. Accurate Auto Insurance also provides SR22 certificates to help you get back on the road quickly. We can help make sure you get the absolute lowest quotes available, keeping you and your wallet safe on the road.