How Intentional Crashes Cost Car Insurance Customers
On April 23, 2010, after an eight-month investigation, Florida deputies in Hillsborough County arrested 22 individuals as part of an auto insurance fraud ring. The participants in the network operated by meeting to stage car accidents, intentionally colliding with other cars in such a way as to avoid real injury. Sometimes deliberate damage was done to the car before the collision in order to increase claims. Several people would ride in the car so that they'd be able to file multiple claims, increasing payout. Crashes would take place, but sometimes no one would even be in the car during the accident. Fake health clinics were then set up where fraudulent claims could be processed. The defendants were taken into custody and charged with insurance fraud, many still wearing their fake clinic attire.
These 'crash for cash claims' result in great cost not only to insurance companies, but to other policy holders with legitimate claims, as they drive up the costs of car insurance to compensate for the extra money paid out for fraudulent claims.
Car insurance fraud falls into two classes: “hard” or “soft.” Soft fraud involves legitimate claims that are padded to increase payout, for example, adding separate damage to the claim, colluding with a body shop to increase an estimate, or having a doctor schedule needless medical visits. Staged collisions fall in the category of hard fraud, because they involve totally illegitimate, invented claims. There are several common techniques for staging accidents: intentional rear-end collisions, where the driver rushes in front of your car and slams on the brakes, forcing you into a crash; then there is the driver who gives you room to merge into traffic, and then deliberately crashes into your car, and blames the accident on you; there are also those who come onto the accident site and recommend a particular auto body shop to repair the damaged vehicle, or a specific doctor to provide medical assistance, either of which then illegally pad your bills.
The honest citizen can do a number of things to protect himself: avoid driving too closely to the car in front, just in case the unscrupulous driver decides to take advantage of your proximity by slamming on the brakes; if you are in a collision, take down the names and all pertinent information of every passenger in the other car so that no more people than necessary can file claims; also observe their demeanor, particularly if they seem fine after the accident but suddenly act injured when the police arrive. These are only a few things the conscientious driver can do to help avoid the possibility of crash for cash claims, keeping insurance rates low and drivers safe.