Watch Your Wallet: 3 Common Auto Insurance Scams to Avoid
There’s always someone waiting to take your hard-earned cash in a scam or scheme. Insurance scams are common, and this includes auto insurance scams.
One of the problems with auto insurance scams is that you end up with a mark against you in your driving record. This means higher insurance premiums, and may even include legal costs. So, even though the insurance company might cover the big costs, you still take a hit to your pocketbook.
If you want to avoid being involved with shady dealings – and especially if you don’t want a scam to deplete your financial resources – here’s what to watch out for:
Fake injury
In order to make the most of a car accident, a scammer might fake an injury. This might even happen in a fender bender, when the other person’s car is barely damaged. A common claim is that the driver is suffering from whiplash. Other injuries might be claimed as well. A file claimed with the insurance company can be paid down the way.
Watch out, though: in many cases, these types of auto insurance scams can’t be carried out alone. A scammer might be working with doctors and physical therapists to get “documentation” for an injury. Once again, your company pays out and then your insurance premiums go up.
Forced rear-end
This is one of the most common auto insurance scams. With this bit of fraud, a driver slows down or comes to a stop during a busy time of day. In some cases, this happens at intersections, or with an on-ramp for a highway. As the driver is slowing down or stopping, s/he suddenly moves in front of your car. You might be taken by surprise and not have enough time to react in a way that helps you avoid the crash.
Because the rear driver is often assumed to be at-fault in these types of accidents, you are considered the cause of the trouble. Your insurance covers the costs, including a probably injury claim (even if injury hasn’t occurred). And, of course, it appears you’ve caused a crash and your insurance premium heads higher.
Fake victim
You might be surprised to discover that some scammers don’t just fake injuries to themselves. They might even fake injuries to people that don’t exist. In some cases, the fraudster will file a claim, and say that there were passengers in the car when there were none, or say there were three passengers instead of two. Of course, the extra passenger is the one hurt. You end up with a claim filed against you, and once again your premiums go up.
Reduce your chance of falling victim to auto insurance scams
If you want to reduce the chance that you will be a victim, the best thing you can do is stay alert. Try to avoid staged accidents and forced rear-ends. Also, take pictures if you can. Document the damage to your car and the other car, and take pictures of the other driver and any passengers. File a police report, even if it seems minor, so you are on record.
While you won’t stop every fraudster every time, this can be one way to help reduce your exposure to auto insurance scams.
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