Every day, somewhere in the world, a person becomes a victim of a car insurance scam. People don’t think much about this until they become the victim. In order to understand what it means to be a victim of car insurance fraud, it will help to know what a car insurance scam looks like.
Unscrupulous people have figured out that you can make money by cheating insurance companies with false claims.
There are many ways that the scam is set up. The outcome is always the same. A person claims to have been injured because of your poor driving. Ideally, they claim to be heavily insured. This allows the damaged person to sue your insurance company and receive a large settlement. These cases are often settled out of court to resolve them quickly before huge legal and medical fees can accrue. Another example of a car insurance scam is when someone purposely causes you to rear end them, then pockets the money from a claim or lawsuit.
The insurance company is aware of the fraudulent claim in many instances.
Even if the claim is fake, it is almost always cheaper for the company to settle the claim than to litigate it. The criminals count on this to be the case. They are not usually seeking millions of dollars. Ultimately, a settlement of 10 to 50 thousand dollars will resolve the case and clear it from the insurance company’s books. This sounds terrible, but going to court can cost this much or more in legal fees alone, even if the company wins. If the insurance company is unlucky enough to lose the suit, the numbers can run up toward a million dollars in a blink.
Insurance fraud can be a deliberate act that is committed to set up the claim.
Fraud can take place in one of two ways. In the first way, a person is in a legitimate accident and decides to fake injuries to take advantage of the situation to try to make a few thousand quick dollars. In the second way, the accident is staged, with you as the financial victim. It looks like a real accident, but the perpetrator engineers the circumstances that result in an accident that allows him or her to fake the injury and go after some big money. The injuries can result from the car striking a pedestrian or a set-up rear end accident, with the criminal stopping quickly in front of you so that you will hit his or her vehicle.
Back and neck injuries are the most usual claims from these fraudulent acts.
Criminals know which injury claims are the most difficult to disprove. So, these body parts are used as the injuries to prevent the scam or the fraud from being discovered. Normally, a skillful attorney is involved to coach the “victim” about how to behave to stay in character for the injuries.
If you are the person chosen to be sued, you need to take some steps to mitigate the damage.
You do have some things that can be done to help your cause. If you are uninsured, you will need to hire a good lawyer and possibly a private detective. If you have good insurance, they will handle the legal matters and any investigations that they deem necessary. You may still want to stay actively involved as much as possible to try to prove your innocence in the scheme.
Seek out witnesses to the accident who may be able to testify that the injury was faked.
In the case of hitting a pedestrian, for example, someone may have seen the person time your car for an impact that looks like it could have been real. Normally, the culprit will try to do it in a way that allows a lawsuit without actually getting hurt. Several good witnesses may be able to verify that it was a set up as a scam to defraud the insurance company.
Follow the legal advice of your attorney or the insurance company’s attorney.
You may need to be careful about what you say and do that might make the case more difficult to win. The professionals are being paid to represent you. Let them do their job and earn their money. You need to ask about and be be aware of the limits of your personal liability that may exceed your insured amounts. This can affect what approach needs to be taken to limit your losses. Normally, these scammers only want what is easy to get. So, they will stay within the liability limits of your insurance.