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Are Auto Insurance Scams Making Our Roads More Dangerous?

Last November, the Pennsylvania Attorney General’s Office announced that its Insurance Fraud Section had charged 50 people with insurance fraud in excess of $1.1 million for their part in a wide-ranging scheme to cheat insurance companies by staging auto accidents. This story naturally raises questions about just how prevalent auto insurance fraud might be and how much more dangerous this type of crime is making our nation’s roads.

The National Insurance Crime Bureau estimates that as much as 10 percent of property-casualty insurance claims may be fraudulent, making insurance fraud the second most prevalent white collar crime after tax evasion. The bureau cites “unscrupulous and dishonest collision repair operators” as “key contributors to the…fraud problem.” These collision repair operators often work with equally unscrupulous tow-truck operators who funnel unsuspecting accident victims to them, and dishonest insurance adjusters who inflate damage estimates for bigger payouts and receive a kickback on the illegal transaction.

The real risk to innocent motorists comes when accidents are staged or faulty repairs are made. The Coalition Against Insurance Fraud explains three ways that fraudsters intentionally cause accidents as part of an insurance scheme:

  • Swoop and squat — When vehicles are traveling in parallel lanes, the perpetrator vehicle will swoop into the adjacent lane, cutting off the mark’s vehicle and then jamming on the brakes to cause a rear-end collision. The driver or a passenger in the perpetrator vehicle will feign serious injury and later file a personal injury claim as well as a claim for property damage.
  • Drive down — When lanes merge in traffic, the perpetrator will wave a victim on and then accelerate, causing a crash. The perpetrator will later deny making any kind of a gesture, and the victim, who violated right-of-way laws, is on the hook for property damage and injury claims.
  • Sideswipe — This is more opportunistic than the other scams. In dual turning lanes, fraudsters look for vehicles that drift into their lane and then they accelerate, causing a collision.

Fraudsters often plan to stage accidents at a particular location where they have a co-conspirator waiting. That conspirator acts as a Good Samaritan, but it’s his job to get the victim to a dishonest repair shop, doctor, or lawyer.

As if these tactics didn’t make driving dangerous enough, dishonest mechanics further endanger motorists by making faulty repairs. These include faulty airbag replacement, where instead of installing a new airbag, the mechanic stuffs the compartment with packing peanuts or some other material to activate the sensor. A driver who gets into a subsequent accident will not have an airbag to cushion the blow.

Our attorneys are concerned about road safety, and we urge our clients to report any incidents of suspected fraud, to only do business with reputable mechanics, and to seek medical treatment from a provider they can trust.

If you are injured in an auto accident in Virginia, North Carolina or South Carolina, trust a law firm with more than 200 years of combined legal experience. Call Marcari, Russotto, Spencer & Balaban at (888) 351-1038 or contact us online to schedule a free consultation.

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