When you ask for a car insurance quote, you may not be thinking about the many ways that insurance can backfire if you're not careful. If accidents are honestly reported, the compensation will be fairly distributed, but there are a thousand ways criminals can exploit your insurance policy in order to be compensated for losses that never occurred, making you the victim of a car insurance scam.
The more devious of these scams can be implemented by criminal rings that specialize in pulling off elaborately staged accidents like everyday work. A common tactic called the “Swoop and Squat” illustrates the basic idea of this sort of car insurance scam. First, an accident that makes the criminal the victim (and thus eligible for payment) is created. One driver quickly moves in front of your car only to brake suddenly, while his partner stays close beside you to ensure you cannot swerve to avoid the inevitable collision. Once you’ve run into the car ahead of you, the wing-man just continues driving, and you are stuck with a rear-end collision for which you are automatically responsible. The passengers in the “squat” car that you’ve run into can now file claims for the damage done to their car and for the cost of treating entirely made-up injuries they say were caused by the collision. They can have a repair shop and even a medical professional in their inner circle, in order to corroborate their story and heavily inflate the prices of all repairs and treatments in order to increase the compensation they receive.
Think this tactic is insane? The list of them goes on and on. The techniques range from subtle to downright outrageous. Someone can simply make up a hit-and-run of which they were the victim, or use friends in the automotive, medical, and legal fields to help them create an accident that exists only in documentation. Those are just the subtle ones.
There’s the “T-Bone” technique: a criminal can just sit at an intersection that’s as empty as possible, waiting for a good moment to suddenly rush out and ram into an intersecting car. He’ll have plenty of “witnesses” ready to corroborate his story: that you ran a red light or stop sign. They’ll only be one person shouting angrily that you’re innocent, and that’s you. A “Sideswipe” is when someone can make left turns and lane changes over and over until there’s an opportunity to create a crash, thus keeping themselves in the technical right-of-way despite their obvious mischief.
So, next time you get cheap car insurance quotes, remember that some of the people who understand insurance the most are people who make it their livelihood to exploit it (and you).