Car Insurance Companies Fight Fraud with Crash for Cash

By: Justin Vasquez, Car Insurance Analyst
CheaperCarInsurance.com

Car insurance companies are facing an ever rising number of fraudulent claims these days and they’re sick of it. While every state has its share, Florida seems to have become the headquarters for those committing the car insurance fraud. A ring of scam artists was recently busted there and now the state is going on the offensive with their new Operation Crash for Cash.

Led by the Hillsborough County Sheriff’s Office, the operation is focused on taking down “crash rings.” The Sheriff’s Office is being aided by the Florida Department of Insurance Fraud, the National Insurance Crime Bureau (NICB), Direct General and several car insurance companies.

Who is Running the Crash Rings

After 50 arrests and multiple investigations, Crash for Cash has discovered that there are three main types of people involved in the scams.

• Drivers and passengers who stage the accidents and/or fake injuries
• Medical personnel who support fake injury claims or provide excessive medical treatments
• Runners, the people who solicit the victims of real crashes

The rings are very well organized and do operate around the country, though they seem to work more frequently in Florida, particularly Central Florida.

How They Do It

Just what do crash rings do? They have several ways of getting money out of the car insurance companies.

Staged accidents. These range from faking being hit by another vehicle to jamming the gas pedal and claiming it was stuck. One young man was recently accused of dousing his vehicle in gas and setting it on fire to get the insurance money.

Fake claims. Oftentimes, the accidents are real and that’s where the runners come in. They go to the “victims” who are either slightly injured or fine and suggest that they fake injuries. The runner will help them place the claims, for a percentage, of course, and take the victim to a medical facility that is in on the scam.

Switching drivers. Another very popular form of fraud is to lie about who was driving. This was the case in a recent accident that was caused by a 17 year old driver who crashed the family car while backing out of the driveway. To keep the insurance premiums lower, the family told the insurance company and police that the mother had been driving.

As you can see, car insurance scams can be very elaborate, or quite simple.

Car Insurance Companies: Not the Only Ones Affected

The problem with these car insurance scams is that they affect everyone. When too many fraudulent claims are placed, the insurance companies lose a lot of money. That results in car insurance rates rising . . . a bad thing for all concerned. Let’s take a look at what happens when too many insurance schemes happen:

• Car insurance premiums rise
• Car insurance companies take longer to process claims
• More claims are refused on the grounds of being suspicious

Car insurance companies aren’t the only ones affected by these scams and Operation Crash for Cash is out to put a stop to the fraud and lower insurance premiums again.

Posted: May 05, 2010