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Car-crash scams on the rise

Gangs of thieves stage accidents, fake injuries and then collect millions in fraudulent insurance claims.

By Teresa Mears May 11, 2010 2:21PM

As of last fall, Jonathan Jones had been in 42 car accidents in nine years.

 

"Maybe I should have been more careful. Maybe . . . well, all right. I definitely should have been more careful," Jones said.

But a report on "Inside Edition" (you can watch it here) pegged Jones as a con man who stages auto accidents and makes fraudulent insurance claims. The "Inside Edition" report shows Jones’ white truck speeding to catch up with another car and then hitting it in a Wal-Mart parking lot in North Carolina. Then he accused the other driver of causing the crash.

 

Questionable insurance claims from such staged crashes are on the rise, the National Insurance Crime Bureau reported this week, up 46% from 2007 to 2009. Florida leads the list of states with the highest number of claims from staged accidents in the three years (3,006), followed by New York (1,680), California (1,619), Texas (792) and Illinois (433).

 

The criminals usually work in groups to stage the accidents and make fraudulent insurance claims. A typical scam might include paid witnesses, several drivers, passengers who will claim injuries, and medical providers who will make false claims for the “treatment.” The NICB has free downloadable brochures in English and Spanish explaining staged accident fraud scams as well as other types of fraud.

 

The NICB also has videos showing some of the most common types of staged accidents.

Auto insurance fraud adds $200 to $300 a year to the average annual insurance policy cost, Joanne Helperin wrote at Edmunds.com, citing statistics from the NICB. But that’s not all you pay because every business has to buy insurance, which is factored into the cost of goods and services.

 

Staged accidents are just one type of insurance fraud, Helperin said. A type becoming more common in the recession is when an owner who is “upside down” on a car loan abandons the car, maybe dumping it into a lake or torching it, then reports it stolen.

 

Jones, the North Carolina bad driver interviewed by "Inside Edition," was charged with 11 counts of insurance fraud and nine counts of assault with a deadly weapon for using his car to hit drivers in parking lots. He received probation and a suspended sentence on at least some of the counts, according to the North Carolina Department of Corrections offender database.

Here are some tips from the Coalition Against Insurance Fraud to avoid becoming a victim of a staged accident:

  • Never tailgate. This will give you ample time to stop if the driver in front of you suddenly steps on the brakes.
  • If you’re involved in a collision, count how many passengers were in the other car. Get their names, phone numbers and driver's license numbers.
  • Pay attention to how the passengers behave. Did they stand around and joke, but suddenly act "injured" when the police arrived?
  • Keep a camera with you. Take pictures of the other car, the damage it received and the passengers.
  • Call the police and get a police report, even for minor damage. A police report that says the accident caused only a few scratches will make it harder for crooks to claim serious injuries or major damage.
  • Call your state insurance fraud bureau if a stranger tries to steer you to an unknown body shop, doctor, chiropractor or lawyer. Give officials the names, addresses and phone numbers of these providers.
  • Keep careful records of your medical treatments. Compare those against the statements you receive to make sure the bill wasn't padded or treatments fabricated.

Related reading:

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