It may seem innocent enough: get in a fender bender and exaggerate your injuries to get a higher compensation amount than you would otherwise. These auto insurance companies are so huge and rich it wouldn't matter, right? But it doesn't just impact the industry, it impacts all our Bellingham friends and neighbors. Car insurance companies insuring Bellingham and Whatcom County drivers have to account for these exaggerations and other kinds of fraudulent insurance claims. On the whole, it makes everyone's insurance premiums more costly.
You may be wondering just how much money is fraudulently claimed? Studies estimate almost 25% of the bodily injury claims related to auto crashes are bogus! You read that right: one out of four. This impact is felt across all insurance premiums, and some estimates say an extra $200-$300 per year is tacked on every car insurance premium to cover for this fraud.
There are two types of insurance fraud, called "hard" and "soft" fraud claims.
Hard fraud occurs when an insurable event is either staged or fabricated outright. This includes scams such as phony hit and run accidents, triggered rear-end collisions, and fake car thefts. Car insurance companies don't know who your friends are; how would they know you and Charlie put together this scheme to make a little extra cash?
Soft fraud refers to inflating a legitimate claim to cover nonexistent or unrelated charges. Examples include claiming damage from a previous event or racking up unjustified medical expenses claiming the wreck was at fault. Underwriting fraud, or misrepresenting your insurance information to lower your premiums, may also be considered a form of soft fraud.
Fraudulent Accident Claims are Increasing
According to the National Insurance Crime Bureau's 2013 report, suspected cases of auto insurance fraud rose 12.7% from 2011 to 2012, reaching a nationwide total of 78,024. This raised the three-year total from 2010 to 2012 to over 209,000 questionable claims (QCs).
Types of Fraudulent Car Accident Claims
It looks official: Lawyers, doctors and mechanics submit claims for payment of services for an accident that never happened
Someone invents a hit and run that didn't happen
Person tries to get rear ended (ex. by breaking very quickly) knowing that the accident will be blamed on the driver who hits them. The “victim” then claims excessive/fake injuries.
After causing an accident, the person has a fake witness who makes false claims against you. ex. running a red light or speeding.
What You Should Do To Protect Yourself From Fraudulent Claims
If you're in an accident, there are things you should do to protect yourself from someone making false claims or exaggerations against you.
- Report the accident to police. Even if it's minor, calling emergency services will prompt an officer to come to the scene and make an official accident report. Insist that they do.
- Take photos and notes of any accident, no matter how minor. Remember to photo the cars, scene, and passengers. Make notes on whether or not passengers were wearing seatbelts, and if they appear or report being injured. Again, if you call 911 and report that people were injured, paramedics will come and assess the injuries on the spot.
- Do not sign blank forms. No matter how nice someone seems, just don't do this. Would you sign a blank check over to a stranger?
- Overly helpful people who appear on the scene might be involved in a scam if they suggest a certain towing company, lawyer, or repair shop. If someone offers to make a call to services for you, just have them call 911 instead, or write down companies they'd recommend. Ask friends and family members for a referral, or check out Yelp, Google, or other internet sites that review services.
- Contact your insurance agent or company immediately.
- Make sure to exchange driver’s license, insurance and car registration information with others involved in the accident, and get names and contact info for witnesses.
Car accident claims are confusing enough without having to worry about fraud. If you or a friend or loved one is involved in an auto wreck, call me. I can help you wade through the myriad details and paperwork that a car crash can generate. Car insurance companies are wary to pay out high claims for many reasons, including possible fraud. But that shouldn't keep you from getting what you deserve if you're injured through no fault of your own. My track record shows how my decades of experience and helpful staff help accident victims get fair, full claims as quickly as possible.
Tips on what to do after a car accident