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Reporting Car Insurance Fraud (Part 1)

Written by Michele Wilmonen. Posted in Research Last Updated: 11/30/2011

Anyone can play an important part in helping to stop car insurance fraud.

reporting car insurance fraud

Car insurance fraud can be a simple false claim or an elaborate scheme.

In a perfect world there would be cheap insurance rates and no car insurance fraud to have to deal with. Actually, in a perfect world car insurance probably wouldn’t be needed because there would be no car accidents. But, since we don’t live in a perfect world and we do have to deal with car insurance fraud, you need to know how to handle it.

Car insurance fraud can happen anywhere in the car insurance process. It can be found in the claims process, buying insurance through an agent and at also with the insurance companies you are supposed to be buying this protection from.

Car Insurance Fraud in Claims

Car insurance fraud is most rampant in the claims department with people filing fraudulent claims. Fraudulent claims can happen with any party also. There are claims that are reported by people claiming to be victims of accidents when there was no accident. Also when there was an actual accident but it was so minor that there should be no damage or injury.

People also report accidents with their own insurance company for damages that they cause to their own vehicles on purpose. Why would they do this? To get cash from the insurance company for the damages for the car; this is most often done when someone is in financial trouble.

Elaborate Car Insurance Fraud Schemes

When I worked in the claims department the most elaborate fraud scheme that I had ever seen involved multiple parties. Multiple vehicles would box in a car (one in back and one on the side) and then another car involved in the scheme would cut in front of the victim and cause an accident. All of the people in the other cars would claim that they witness the victim rear end the front car, but would leave out that the car cut them off.

This scheme even involved doctors filing paperwork for false medical treatment and fake injuries. So the doctors would get the money from the insurance companies for treatments never performed. Then the people in the front car would get huge settlements from the insurance company that would then be split up between all of the parties involved.

They were finally stopped when someone caught on to the scheme, but not before they had scammed a very large sum of money already. This was a very elaborate scheme, but no matter how complex or simple most car insurance fraud is not caught until someone reports that it is happening.

To Be Continued………..

(Because car insurance fraud is such a large problem, all of the information couldn’t fit into one post. Please join us December 5th for part two of Reporting Car Insurance Fraud. Part two will include car insurance agent fraud, car insurance company fraud and the different options that you have to report car insurance fraud.)

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Michele Wilmonen

Michele’s first introduction to insurance was working for a major insurance company as a file clerk and a mailroom supervisor in a regional office. She learned insurance directly from underwriters and claims adjusters from questions and also watching them do their job. Since then, she’s earned a number of insurance certifications from the Insurance Institute of America and also a Bachelor’s degree from the University of Idaho. She blogs at Car Insurance Guidebook.

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