ACARRCar insurance is a huge industry and unfortunately, where there is big, there is money and where there is money – there is fraud.

You may wonder if this can affect you, the innocent policyholder. The truth is, yes it can.

According to Edmunds, auto insurance fraud raises everyone’s rates, approximately $200-$300 per year. It’s a real issue and along with the money that other policyholders have to pay, it’s an expensive cost for many others involved, including the companies themselves, the law enforcement agents, and other agencies working on these types of cases.

How People are Scamming Car Insurance Agencies

There are quite a few common car insurance scams, and you can become involved in these even if you do nothing wrong.

The following are worth knowing about in case you suspect something fishy after being in a wreck.

Staged accidents oftentimes involve a forced rear-end collision that occurs when the scam artist simply stops or slows down in traffic, meaning you can do nothing else but hit them from behind. Because the driver who rear ends another car is the one who is liable, the scam artist gets the pay out. A good idea is to always keep your distance from the car in front of you when driving.

Always Be Vigilant Behind the Wheel

Another kind of staged accident is when a driver pretends to let you have the right of way, then hits you – maybe at a four-way stop sign or in a parking lot. Just be vigilant when driving and ready to react.

The thing about staged accidents is that not only can the scam artist get the car insurance to pay off for the accident, but they often also claim bodily injury, especially in the fake rear end collisions.

This one is hard to combat as the fake injuries are often hard to dispute, but if you ever do get in an accident, make sure you call the police and have a report filed. It will be easier if the matter ever needs to be disputed or go to court. Also, check how the other person is acting before and after the police come.

If you think you’re being scammed, let the insurance company and the police know.

Often a scam artist won’t want you to call the police, but remember, it’s not up to the other party; if you feel you should get the police involved, don’t let anyone talk you out of it. It can even be a red flag that something fraudulent is underway if they try to talk you out of calling the police, whether through woe-is-me stories or intimidation.

Lastly, scam artists may even pay people to be their witnesses, so keep your eye out for anything that seems off, and trust yourself to recount what happened.

Car insurance fraud is a serious issue happening.

Anyone can be the victim of it, and in fact, many drivers already are, seeing their policies increase due to the big money being paid out.

Photo credit:

Read more: