Common Auto Insurance Claims Fraud


Insurance companies are finding that the number of claims just keep going up with a failing economy. And this means more work for the special investigations unit of the company. Every auto insurance company will have a unit dedicated to finding individuals who are faking an auto insurance claim. And if discovered, it can mean not only that your policy will be terminated and your loss will not be reimbursed but also that you might end up in jail for fraud.

It has become very common for fraudster to leave their car keys inside the car with a hope of increasing the chances of it being stolen. The insurance companies know this and will hence ask for both the set of keys that you entitled to have when you file a claim. They will also get suspicious if the car is found without signs of forced entry or with the keys.

Torching the car is also a common technique. And they put the blame on vandals. But forensic investigators can almost magic with the latest computer techniques and hard evidence that they can collect from the scene of the crime.

Medical insurance fraud is also on the rise. People start going to the chiropractor very often after an accident. And there might be some medicines prescribed which may not be essential for the condition that the accident victim is suffering from. Insurance companies have medical experts on their teams to analyze such cases. Whiplash is a commonly faked medical condition. This is a condition where the person’s spinal chord is affected due to the severe jerk that is given to the body as a result of a crash. If the bumper is not sufficiently damaged, the insurance company will know that the impact was not strong enough to cause any damage.

People also add members like family or friends to the list of people that were in the car when the accident happened even if they were not there. If your account does not match with what the insurance companies agents find out from the police report of from the witnesses then you can get into trouble.

There have also been cases of people adding damage that was not caused in the accident. Again the police report and witness accounts will come into play in such cases.

It is also common for fraudsters to ask the repair shop to add the cost of the deductible to the bill. Not all big repair shops will do this to risk their reputation in order to help you commit fraud. But the insurance companies know how long a typical repair will take and also the cost of the parts and hence there is a high risk of getting caught.

The most common fraud technique is buying auto insurance coverage for damage that has already occurred. For example, if you do not have comprehensive coverage and a tree branch falls on your hood denting it and breaking your windshield, you will not be able to claim for damages. But if you then get comprehensive coverage added to your insurance coverage, you can file a claim within a few days. But the insurance company will find out as they will know that you checked the cost of fixing your hood with body shops before getting the coverage.