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Staged car accidents mean big losses for insurers

When a driver is involved in an accident, even if no one is injured, there may seem to be no end to the hassles of getting estimates for car repairs, dealing with insurance adjusters and waiting to get one’s vehicle back on the road. However, for some, this is all in a day’s work. These are people who stage car accidents to fraudulently collect insurance money.

When it comes to insurance fraud, auto insurance makes up more than half of the false claims. New York ranks high among states where auto insurance scammers take big chances. This may be as simple as failing to alert the insurance company of previous moving violations. More commonly, car owners may exaggerate the amount of damage their vehicles sustained in an accident or the level of injury they suffered.

However, some elaborate schemes involve creating situations where other drivers’ safety is at stake. They may even fill their own cars with passengers, including children, to increase the damages they can claim. Scammers benefit when an insurer determines it is less expensive to pay the claim than to take the driver to court, but the average insurance carrier pays. In fact, by some estimates, some families pay about $1,000 extra for insurance to cover the cost of fraud.

Staged car accidents and other forms of fraud are only one way in which insurers lose money. Any complex insurance claim or appeal of a denied claim places an insurer at risk of a large payout. Fortunately, with the assistance of a New York attorney, insurance companies can take steps to resolve these cases efficiently and resourcefully.

Source: wspa.com, “Criminals stage crashes to claim insurance money, driving up premiums“, Stefany Bornman, May 23, 2018

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