Do you drive a nice car in an urban area? Then you'd better watch out. Crooks may be looking to crash into you to cash in on your auto insurance.
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Staged auto accidents are big business, costing consumers and insurers billions of dollars annually, according to the Insurance Information Institute.
The goal is to rip-off an insurance company, not necessarily you. But by staging an accident that's seemingly your fault, the crooks put you on the hook for both your deductible and potentially higher insurance premiums - not to mention possible injuries from the accident.
The crook profits by suing your insurance company for both injuries and damage that may never have happened, exaggerating the severity of the accident - and often claiming injuries and lost wages for people who were not even in the car. In some cases, the drivers work with medical mills that fabricate treatments for bogus injuries to drive up medical reimbursements that are often partly kicked back to the perpetrator.
"Staged auto accidents are a dangerous criminal activity that target innocent drivers with increasingly bold schemes aimed at defrauding insurance companies," said Loretta Worters, a spokeswoman with the Insurance Information Institute in New York. "Honest policyholders ultimately end up paying more for auto insurance, but the people committing the fraud can also cause serious injuries or death."
How can you protect yourself? Start by knowing where you're most at risk; what to look for; and what to do to both avoid accidents and handle them when they simply can't be avoided. Here's your guide.
Profile of a victim
Victims are not targeted at random. The crooks are looking for four things:
- Urban areas, where heavy traffic can make it tougher to avoid an accident
- Wealthy areas, where drivers are more likely to be well-insured
- Nice, new cars - also likely to be well-insured
- Women (driving alone) or elderly drivers, who are less likely to be confrontational in an accident.
They also prefer so-called "no-fault" states, where both victim and crook will collect reimbursement from their own insurers. That presumably gives the victim less incentive to ferret out and report the fraud. If you happen to live in Florida, you're at particular risk, according to the National Insurance Crime Bureau.
Four most-common staged accidents
The first thing to understand about a staged accident - particularly in an at-fault state - is that the crook needs to get you to crash into them - or otherwise appear at fault. That makes them less suspect to the cops and gives them the ability to collect against your insurance company.
Here are the four most common ways they do it.
- Swoop and squat. Three cars are involved in this one - you, the victim; and two crooked driver/accomplices. The "squat" car drives in front of you; the "swoop" car is likely to start behind you, possibly tailgating (and pushing you to do the same with the slow-moving "squat" car). The "swoop" driver will then speed, pass you and cut off the "squat" driver, who slams on the brakes. You rear-end the "squat" car and the "swoop" car disappears.
- Sideswipe: At busy intersections where two lanes can (but one doesn't have to) turn, a crook will inhabit the middle lane, acting as if they're going to go straight. If you perceive you have the room and start drifting into the next lane, they quickly switch directions to sideswipe your car, which is now in their lane.
- Panic stop: The criminal drives an older car filled with passengers. You think the passenger in the front is turning around to talk to passengers in the back, but actually the real job is to watch you. They're looking for the moment when you're most distracted, maybe because you've looked away to change the radio station or answer your cell phone. At that moment, the driver in front of you slams on the breaks. You smash into them, and every passenger in that car (and some who where never there) claims to have whiplash.
- Drive down: You're merging into traffic and the crook waves you into the tight spot ahead of him. But as you speed up to go, so do they, causing a collision. They argue that they never waved you in; you simply merged into them.
The best way to avoid getting taken - and potentially hurt - in one of these staged accidents is to practice all those dull but effective defensive driving techniques that your mother (or driver's ed teacher) told you about.
- Leave ample room between you and the car in front of you.
- Ignore pressure to tailgate - or retaliate.
- Resist distractions - even if that means turning off the cell phone while you drive.
- Be aware of the cars around you.
- Particularly if you're among the targeted group of victims - a woman driving a nice car, for example - drive smart. If someone tailgates you, instead of speeding up (or slowing down to annoy them), move to the next lane and out of their way. Let the next car be the victim.
If you end up in an accident - particularly if you suspect fraud - be aggressive.
- Get the other driver's license and insurance information.
- Ask for driver's licenses and/or names & addresses of every passenger in their car.
- If you have a camera or smart phone, take pictures of the damage to the cars and of the occupants of the other car. (This helps foil crooks who maintain that there were more passengers or that the damages or injuries were serious.)
- If you suspect a crime, call the cops.
©2011 CBS Interactive Inc., a CBS Company. All rights reserved. Used by permission.
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