These crooks try to profit from your misfortune, and it all happens in a flash. In some cases, con artists stage accidents using only their own vehicles and a few associates. In others, they target innocent drivers.
Among the tactics noted by the National Insurance Crime Bureau:
When police arrive, the other driver and passengers complain of aches and pains and blame you for the accident. Later, they file thousands of dollars in claims for injuries against your car insurance company.
"Most of the damage is done by groups of people who make their living doing this," says Frank Scafidi, spokesperson for the National Insurance Crime Bureau. "They're knuckleheads, really."
Last year, property insurers referred 28,553 suspicious medical claims to the National Insurance Crime Bureau, a 10 percent increase from 2008. Seventy-one percent of these were personal auto insurance claims.
The bureau projects if the current pace of questionable claims in the first half of 2010 continues, the total will rise 13 percent this year compared to 2009.
Con artists are becoming more sophisticated and organized, says Bob Cline, national special investigative unit manager for Esurance, an online direct-to-consumer insurance company headquartered in San Francisco.
The crooks work with shady clinics and attorneys, use fictitious names and vehicles that can't be traced to previous accidents, and recruit witnesses and passengers with no criminal histories. In many cases, these recruits are recent immigrants unfamiliar with the legal system.
Another trend Cline sees is the growing involvement of street gangs drawn by a lucrative payoff. Until recently, most of the groups that pulled off auto insurance scams were specialists not involved in other criminal activity.
Florida, California, New York, Texas and Illinois are the top five states for questionable medical claims, according to the bureau. The top five cities are New York; Tampa, Fla.; Miami; Los Angeles and Houston.
"Central Florida is the staged accident capital of the country," Cline says.
A 2010 study by the National Insurance Crime Bureau shows the number of insurance claims related to suspected staged or deliberately caused accidents jumped 58 percent in Florida from 2008 to 2009. Tampa is now at the epicenter of the trend, according to the bureau.
Car insurance scammers look for victims who are alone and drive nice cars likely to be well-insured, Scafidi says.
"They're not going to pick on somebody driving a beater," he says.
Seniors and women are more at risk than men and younger people. Cline says crooks also prey on distracted drivers. Some scammers who have pled guilty told investigators they looked for drivers talking on cell phones.
If you're in an accident, trust your gut if anything seems fishy. Report suspicions immediately to your car insurance company.
"Gather as much information as possible when reporting potential instances of fraud, including names and dates, phone numbers, addresses, amount of money involved, documentation and any other information you think is helpful," Loznicka says.
Here are other tips from the bureau to avoid or fight car insurance medical fraud:
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