There are various ways consumers can fall victim to auto insurance fraud, including accident scams, insurer tricks and referral fraud. Whether you're buying auto insurance or on the road, it's important to know how to protect yourself. To keep you out of trouble, we've compiled the most important tips from the National Insurance Crime Bureau (NICB), the North Dakota Department of Insurance, FraudGuides.com and Edmunds.com.
Protect Yourself From Auto Insurance Fraud
Most people are so flustered after a crash that they forget the basics of how to protect themselves from insurance scammers. An accident kit kept in your vehicle could make a world of difference.
When Buying Auto Insurance
- Be wary of insurance offers from door-to-door salespeople, telephone callers or unsolicited Internet advertisements.
- Be suspicious if the price of insurance seems much lower than the competition's. It could be a scam, or the coverage might be full of exclusions that are only discovered when you need the coverage.
- Contact your state's insurance department to make sure the agent and company are licensed.
- Check the company's rating at the Better Business Bureau.
- Make sure "free services" aren't actually hidden in your insurance bill.
- Ask if the insurance company has purchased or invested in vehicle repair shops; this is a red flag. You are not required to use them, and they will not give you better service or prices — in fact, they could be worse.
- Guard your insurance identification number the same way you would your social security number, because once it's stolen, criminals can use it in a scam.
- Be wary if a car pulls in front of you, forcing you to follow dangerously close. You may be set up for a staged accident.
- Trust your instincts. If someone seems to be tailing you or otherwise behaving suspiciously, pull into the nearest gas, fire or police station, or other "safe spot" that you see.
- Carry an accident emergency kit, or at least a disposable camera, in your car.
After a Two-Car Crash
- Exchange information with the person driving the vehicle, including driver license, vehicle registration and proof of insurance. Take pictures of all damage to both cars.
- Count the number of people in the car. Get a name, address and telephone number for each one, not just the driver.
- Call the police, and if possible, have them come to the scene. Get a police report with the officer's name, even if the damage is minimal. This makes it more difficult for a criminal to damage the car later and try to collect a larger claim. Note that in cities where police are stretched thin, the police may not come to an accident scene unless there are injuries reported.
- Avoid people who suddenly appear at an accident scene and try to direct you to specific doctors or attorneys.
- Avoid people who offer you quick cash to fix your car.
- Be wary of tow truck drivers who recommend a specific auto repair facility without being asked.
- Demand detailed bills for any repairs or medical services. Keep all your receipts related to the accident.
- Make sure you get Original Equipment Manufacturer (OEM) parts at the repair shop.
- Be wary of physicians who insist that you file a personal injury claim after an accident, especially if you are not hurt.
- Never sign blank insurance claim forms.
For more tips, see "What To Do After a Car Accident." If you suspect auto insurance fraud, call the National Insurance Crime Bureau at (800) TEL-NICB (835-6422). They'll help you with next steps. Also report potential fraud to your state's fraud bureaus.