NICB Says Suspicious Auto Insurance Claims Have Skyrocketed Along with Premiums

The National Insurance Crime Bureau (NICB) has released a study revealing that elaborate auto insurance scams have led to a 46 percent increase in the number of suspicious claims submitted to insurers over the last two years.

Some think that the increase in auto insurance rates of 4.3 percent since the beginning of 2010 and the 24 percent increase seen over the past three years may have something to do with these scams.

Various Auto Insurance Scams Becoming Popular

According to NICM, staged accidents are just one of the many forms of auto insurance fraud that are gaining popularity among scammers. With this form of fraud, innocent drivers are lured into crashes or scammers are crashing their own cars into each other. Some are even fabricating fictitious “paper” accidents.

Another big scam on the forefront nowadays is coming from medical providers who prescribe expensive treatments for non-existent injuries.

Unfortunately, scammers on both ends of the spectrum have become very elaborate in their techniques and are no longer amateurs. This means the acts are more difficult to catch and have a greater impact on the auto insurance industry.

Avoid Being a Victim of a Scam

NICM has noted that Florida, New York, California, Texas and Illinois are the top five states that have generated the most bogus claims related to staged accidents; however, anyone in any state could become a victim.

To avoid inadvertently contributing to scammers’ goals and increasing auto insurance rates, here are some tips from NICB to stop scammers in their tracks:

  • Maintain a good driving distance: NICB suggests maintaining a good distance between your vehicle and the one in front of you to avoid the “sudden stop” maneuver that could cause you to rear-end them.
  • Get the details of a crash: If a scammer is able to make you rear-end them, be sure to call the police, get a report, keep the officer’s name and get a description of the damages to ensure that the scammer is unable to magnify the damage later and try to claim a large payoff.
  • Take pictures: Use your cell phone camera or keep a disposable one handy to properly document the scene, especially if someone out of the blue materializes suddenly to try to direct you immediately to a doctor or attorney before you have a chance to think about what happened.

The NICB and local law enforcement around the country are cracking down on auto insurance fraud, but in the meantime, careful driving and sharp mind could stop a scammer from making the most of their scam.