All drivers in California must carry the minimum required auto insurance to cover another driver’s injuries and vehicle damage in the event of a crash. However, not many drivers think of insurance fraud, which costs consumers billions of dollars annually. These white-collar crimes can be committed by a driver, repair shop or insurance company. Drivers should be aware of some common insurance scams.
Auto repair fraud
Auto repair shops make up a large portion of insurance-related scams, and the most common type involves vehicle property. The mechanics may take advantage of the driver’s lack of knowledge and install cheap parts, which makes driving the vehicle more dangerous.
One example involves installing cheap airbags or airbags that have been stolen or already inflated to save money. Other examples of auto repair fraud include making unauthorized repairs, claiming parts were lost or claiming a stolen vehicle to get a bigger insurance payout.
Agent fraud often involves stealing premiums by inflating rates and pocketing the extra money. In the worst-case scenario, agents don’t activate the policy, which puts divers at risk.
Another common practice is adding coverage that the driver didn’t authorize. Dishonest agents may use fear to make consumers rush or discourage them from shopping around and comparing rates.
According to statistics, staged accidents happen more frequently in urban areas. A “left turn down” is a common scam in which the dishonest driver motions for the innocent driver to turn first. The fraudulent driver suddenly speeds up, causing the driver to stop quickly and hit them. They then claim that the innocent driver appeared out of nowhere.
A driver might commit fraud by registering an address in a low-cost area or not adding other drivers to their auto insurance policy. Providers commonly cancel the policy, which can leave another driver without coverage if they get into an accident.
Motor vehicle accidents are scary, and the costs can increase if there’s fraud involved. If a person injured in a car accident suspects fraudulent behavior on the part of the other driver, a mechanic or an insurance agent in their case, they may want a personal injury attorney’s help.