Most of us will do almost anything to avoid getting into a car crash, but for some people, a collision is a way to fatten their wallets. They stage accidents involving just enough damage to get a hefty settlement, but not enough to cause serious injury or death. Staged accidents of this type aren’t a new phenomenon, but in some parts of the country, they are becoming an increasing type of insurance fraud that has law enforcement and insurance officials worried.
According to the Nevada State Highway Patrol http://nhp.nv.gov/, the incidence of staged accidents involving semi-trucks is increasing at an alarming rate. Drivers intentionally swerve in front of semi-trailers traveling at low speeds and then jam on their breaks. Due to their size and weight, the semis aren’t able to stop in time to avoid rear-ending the car and won’t swerve into another lane because it could cause an even worse accident. The scammer then denies swerving in front of the semi and files whopping claim against the trucker’s insurance company. Sometimes the scammer has passengers who also claim to have painful back and neck injuries, jacking up the claim even more. These types of claims impact drivers throughout the state by raising insurance premiums. According to the Coalition Against Insurance Fraud http://www.insurancefraud.org/index.htm, insurance fraud costs about $80 billion annually.
To catch these fraudulent claimants, Nevada law enforcement and the Nevada Insurance Council http://nevadainsurancecouncil.com/ have begun a program to install cameras on public highways. Trucking companies are also being advised to install dash cameras that will record staged accidents, providing proof that the truck driver wasn’t at fault and identifying the scammers, who will then be prosecuted.
In New York, auto insurance fraud has become so prevalent that rates are starting to climb significantly for all drivers. Brooklyn Assistant District Attorney Jeff Ferguson says that if something isn’t done to ameliorate it, the average consumer will soon find that coverage is unaffordable.
Because staged accidents are so expensive for insurance companies, they tend to raise overall rates for everyone. Ferguson says that about 36% of auto insurance claims are either fraudulent or contain some form of misinformation. Because of the high number of fraudulent claims filed in the state, parts of New York have some of the highest premium rates in the U.S. The average Brooklyn driver pays roughly $2,150 in premiums, a rate that’s about 80% higher than the rest of the state. The increase is directly attributed to the prevalence of fraud in the area.
Officials in New York are finding ways to hamper the scammer’s schemes, including promoting new legislation that would make the use of ‘runners’ illegal. Runners are people who connect scammers with clinics that perform unnecessary and expensive tests and treatments that insurance companies have to cover.
Last month, federal law enforcement agencies put a dent in the incidence of insurance fraud when they busted a crime ring operating in the New York City metro area. Thirty-six people were charged with scamming insurers out of more than $279 million in fraudulent claims over a five year period. The scheme involved patients, lawyers and doctors who participated in the fraud by helping to make false accident claims. According to authorities, New York’s no-fault insurance laws helped to make the insurance schemes profitable for scammers.
A Brooklyn gang of scammers involving 16 people was also foiled when law enforcement arrested and charged members with staging 12 car crashes between 2009 and 2011. The false claims of the crime ring totaled more than $400,000.Another instance of police thwarting scammers involves the Kentucky State Police http://www.kentuckystatepolice.org/, who arrested and filed charges against two men who pled guilty to insurance fraud in February of this year after they were caught staging a car crash. The crash, which occurred in June of 2011, involved a pickup truck colliding with a motor home. It was initially considered an accident, but after suspicions were raised, investigators were able to prove that the ‘accident’ was no accident and was a deliberate attempt to defraud the driver’s insurance company. Both of the perpetrators are expected to receive prison sentences.
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