6 Common Insurance Scams You Might Not Know of

In the auto insurance industry there’s always scams going around? Insurance fraud schemes are pretty noted nowadays and everyone takes their due diligence to make sure that they aren’t involved in any of them. Even if you’re never in that position we are in one of these scams, rest assured at least once on auto insurance fraud will come your way. if that’s ever the case industry experts I’ve already stated that auto insurance frauds slow down legitimate insurance claims, increases premiums And one way or another it can even put innocent drivers in the line of danger.

In New York City, the Law enforcement officials say that out of every three auto insurance claims one of them would be a fraud. If this is the statistic just for New York City and other cities out there and states. The National Insurance Crime Bureau says that the problem may be even worse in Los Angeles since this city generates the most questionable claims which are potentially linked to organized crime.

There are 5 major cities that have high ratings for fraud and they are Florida, Texas, California, New York and Maryland.

How much fraud actually costs motorists are hard to quantify simply due to the fact that it is unreported. According to Jim Quiggle a spokesperson for Coalition against Insurance Fraud in Washington, D.C.fraud is a “major-league crime involving a wide variety of schemes,”

Out of these major cities, it is said that New York City alone has added over $241 million dollars’ worth of fake auto claims to insurance premiums nationally. But overall, experts have estimated that insurance fraud costs tens of billions a dollars a year.

So we want to educate you about how you can protect yourself against the 6 most common forms of insurance fraud.

Counterfeit Airbags

Whenever a car gets into an accident especially when it’s a heavy one an airbag would inflate. Each year it is said that about 1.5 million airbags inflate during crashes. Once an airbag has inflated, the vehicle would need to be repaired and have a new airbag installed. With that being said it has been reported that a fraction of those airbags being reinstalled is actually counterfeit, which can be life-threatening.

Quiggle says “Crooked repair shops frequently replace the bags with cheap knockoffs, or in some cases just fill the area with junk and garbage,” “The insurer pays for phony work, and the driver ends up with a car that isn’t safe.”

It is recommended if your vehicle has been in an accident you should go to the shop to have been approved by your insurance company. The reason being is you won’t be left with a shady mechanic shop but you’d be left with a reputable mechanic that has been heavily vetted by your Insurance Company.

Whenever you’re buying a used vehicle it’s always a good idea to make sure you get a good vehicle Report. This report will tell you if a car has been damaged in a crash or if it even has a salvage title. If that’s the case always pay attention to the airbag light. A regular car when did start at the airbag light will come on and stay on for a brief moment of time and then turn off. What is the light never appears or the flashes or if it is on you should definitely have the vehicle checked out immediately because used to be signs of a faulty airbag in the vehicle.

Staged Accidents

Staged accidents are something relatively new, and they’re actually increasing quite on an alarming rate. It is reported that there is a 102% increase and these suspected staged accidents.

There are actually a few two kinds of stage action that you should beware of. Here are four of the states of accidents that Nationwide Insurance has brought to light.

  • Swoop and squat: A vehicle is trapped in from a rear end collision.
  • Drive Down: When a vehicle is waiting to make a left turn, it seems as if the coast is clear but a vehicle pulls out and approaches quickly for an accident.
  • Wave down:  When a vehicle is looking to park at the side of the street there are given the okay that they can do so. Then two vehicles set up a crash site with the victim who has given the pass with the wave.
  • Additional Damage: what are the alarming types of products out there two vehicles are in a legitimate accident? The driver who is not at fault at additional damages to their vehicle so when they have it appraised the insurance claim is higher than anticipated.

If you’ve ever been into an accident or if you have gone into an accident it is advising you gather as much information as you can so that way you have some evidence to back you up in case anything arises.

Russel Lazega says “Often car crash cases don’t make it to court until years later, when witnesses are gone and cars have been fixed,” “Demand a police report, take lots of pictures and get the contact information for any witnesses.”

Agent Fraud

When you sign up for auto insurance you automatically assume that the agent who was helping you is honest. That is the case most of the time, but there are some bad apples in the bunch. What are the worst-case scenarios for anyone is dealing with a shady agent? Typically when you’re dealing with a shady agent they don’t set up an auto insurance policy for you the only pocket your premium. So when it’s time for you to use your insurance premium for your coverage after an accident you’ll soon find out that you have no insurance coverage. Why? Simple the agent was shady. You’ll end up having to eat the cost on your own.

In the case that you do have an agent that set you up with some auto insurance premiums oh, there is another tactic that uses which is referred to as sliding. Sliding happens when an auto insurance agent decides to add additional premiums to your policy hiking your monthly Pay. And quickly this can add up to a few hundred dollars every year. One way to avoid this is to make sure that you do your research on what agent you have so you don’t fall victim to any of these scams.

Windshield Replacements

You have a cracked, chipped, or even a broken windshield and you know you have to get a new one but you never really take the time to do so. A stranger approaches you when you’re in a parking lot and tells you that there with a glass company that replaces windshields. And are looking to replace your windshield free of charge as long as you provide them with your insurance information. Did you ever hear the saying that some things are too good to be true? Well in this case it is. According to Farmers Insurance, they say that the windshield replacement it’s almost always a scam. And because it could be a scam the risks are always greater than what you perceive.

But you make question what negative things can happen? Well, you provided them with your insurance information. Now with regards to the windshield replacement policy the quality and the durability of the glass, it’s not that great. But because you provided them with your insurance information they tend to submit false claims under your policy. Once that happens you have to fight to clean it off and in the midst of all of this, it can raise your insurance premiums. And in some situations, they repetitively do so where you evidently lose your insurance coverage. So, of course, the offer may be tempting, but the best thing to do is just step away. If you need a new windshield to reach out to your insurance company and they’ll be able to advise you correctly.

Towing Scams

One of the scam is having a ton of tow truck show up at the scene of an accident. Who was all the adrenaline after an accident in your mind all over the place the last thing you think of is getting everything in order and calling a tow truck? So when one shows up to you saying that hey I can take your vehicle, it’s a life-saving event. But if this ever happens to you be aware because there are known as a bandit Toe. These companies do to your vehicles but when you do get a bill its ginormous.

Sure there are a few things you should keep in mind at the scene of an accident. Call your insurance company to see if you have roadside assistance. If you do let them know and they’ll send the tow truck your way to have everything sorted. If you also have AAA coverage they’re also a great option.

If in the end since you have no Roadside Assistance and you have no choice but to get a tow truck. Your first response should be to call one. We advise that you call a tow truck and they’ll give you a rough rate that you’d be looking to pay when you have your vehicle towed.

Premium Evasion

When it comes to auto insurance fraud sometimes the policyholder isn’t always innocent. You may question how that is possible. So we’ll break it down pretty briefly for you.

Some customers tend to mislead their insurance company by providing them an address that they do not live at. The reason they do this is so they save on their monthly insurance premium. In some cases, customers may live in an area where insurance premiums are higher but have a relative living where insurance premiums are lower. Another related attempt at fraud would be feeling to add a new driver to the household.

When we take into account the negligence of policyholders it costs the auto insurance industry a whopping $16 billion dollars a year.

A Washington DC lawyer Thomas J. Simeone says “Any intentional misstatement on an insurance application can definitely lead to a policy being canceled immediately and a claim being denied,” “Moreover, the insurance company may seek to recover any previous claims paid before uncovering the false statement.”

These are some of the most notable scams inside the auto insurance industry today. So as a customer we highly advise you to make sure that you have the proper research done and you do your due diligence to make sure you don’t fall victim to any of these. Simply because some of these scams can be quite costly where you won’t have any insurance coverage or you will have to pay large sums out of your pocket.