What Are The Most Common Staged Auto-Accidents?

We’re all familiar with a claimant exaggerating their incident. Be that in workers comp or auto insurance. But today you will read about the schemes that fraudsters create to fake an accident and then receive an insurance payout.

What is a Staged Car Accident:

Staged accidents are a common type of car insurance  fraud. In the typical staged accident scenario, one or more drivers, pedestrians, bicyclists, or motorcyclists intentionally cause a crash that would initially appear to be the fault of an unsuspecting driver. Next, the people who staged the accident make claims based on their bogus injuries and their vehicle damage. Staged accidents involve at least one of the following:

• Faked crash
• Faked injuries
• Fake accident reports
• Fake witnesses, or
• Fake victims

Auto Fraud Hotspots

Staged auto accidents happen across the U.S. but they are most likely to occur in no-fault states where insurers are reimbursing their policyholders regardless of who is at fault.

Auto fraud can be categorized as “soft” or “hard” fraud. Don’t let the names fool you. Although the term soft fraud might sound unmenacing, both fraud attempts are criminal offenses that can result in jail time and fines.

Soft Fraud

is when someone is presented with the opportunity of overinflating their injuries or exaggerating the amount of damage their car sustained during the accident.

Hard Fraud

is when an accident, injury, or theft is deliberately staged to collect an insurance payout.

Here are the top states with the most fraudulent crash-injury claims:

1. Florida
2. New York
3. California
4. Michigan
5. And Massachusets

Back in 2006, Florida had 3 cities in the top 10 cities list for Staged Car Accident Scams. This led the state to pass specific legislation against staged accidents. Fraud factors into as many as 1 out of 3 auto claims in NYC according to the National Insurance Crime Bureau, and may be even worse in Los Angeles where more claims potentially linked to organized crime happen than anywhere else.

Statute 817.234 lists falsely reporting damages to insurance companies to be considered a third-degree felony.

“Pursuant to s. 817.234, Florida Statutes, any person who, with the intent to injure, defraud, or deceive any insurer or insured, prepares, presents, or causes to be presented a proof of loss or estimate of cost or repair of damaged property in support of a claim under an insurance policy knowing that the proof of loss or estimate of claim or repairs contains any false, incomplete, or misleading information concerning any fact or thing material to the claim commits a felony of the third degree.”

The Most Common Types of Staged Accidents

The National Insurance Crime Bureau says common types of staged crashes include:

• Swoop and Squat
• Wave Down
• Panic Stop
• Start and Stop
• Side Swipe
• Enhanced Damages

Swoop and Squat:

This common fraud tactic involves two or three vehicles. The plan is simple: one car (the squatter) pulls in front of you, while another (the swooper) swiftly cuts them off. The squatter brakes suddenly, leaving you little time to avoid a rear-end collision. A third car may also be involved, blocking you from changing lanes. After the accident, the swooper and the blocking vehicle disappear, leaving you looking at fault. The ‘victims’ in the other car may then claim bodily injury and vehicle damage, leaving you responsible.

Left Turn Drive Down:

In this scenario, a victim making a left turn is lured into turning early by an oncoming vehicle (fraudster) that then intentionally collides with them. This becomes a ‘you say, they say’ scenario, often resulting in a fault being determined by the obvious damage.

Right Turn Drive Down:

Here, a motorist preparing to make a right turn is suddenly hit by another vehicle, often with passengers, claiming the victim pulled into traffic when it was not clear. Multiple witnesses may corroborate the story, leaving the victim at fault.

Panic Stop / Brake Slam:

In this method, a passenger in the lead car watches for the target driver to take their eyes off the road, then tells the driver to slam the brakes. The victim, not watching at that moment, collides with the lead vehicle, likely being ticketed for following too closely.

Enhanced Damages:

In this scenario, a legitimate accident occurs, but the not-at-fault driver intentionally causes more damage to their vehicle to extract more money from the claim, often with the help of a repair shop that adds pre-existing damage or overcharges for repairs.

The Start and Stop:

Similar to the panic stop, this tactic requires a single occupant. It occurs in heavy traffic where the lead vehicle accelerates faster than necessary, causing the following vehicle to collide when the lead vehicle suddenly brakes.

Side Swipe:

Here, a driver waiting at a stoplight in a double-turn lane is sideswiped by a fraudster claiming the victim swerved or got too close, forcing them out of their lane.

Decrease Financial Losses

Fraud will never stop. In fact, according to this study done by Verisk, more than 36% of Americans believe it is acceptable to submit an inflated auto damage claim, while over 30% of those aged 25-34 said they “definitely would” submit a fraudulent property damage claim.

For these reasons, the ability to identify fraudulent auto schemes helps protect against higher-level financial losses. We’re going to discuss other common auto scams. Next time you see any of the below instances cross your desk you’ll know to flag it for further consideration. Slowly but surely by identifying fraud, you can maintain your competitive pricing and fair coverage for policyholders.

We will also explain why each example is considered fraudulent:

Curb Drive Down:

In this scenario, a driver pulls away from a curb or parking spot to merge into traffic. They check for clearance and proceed, only to be intentionally crashed into by another driver who was waiting for this opportunity. Often, the fraudulent car will have multiple passengers who all claim that the victim pulled into traffic when it was unsafe to do so.

Fraudulent Elements:

Intentional collision, false witness statements from passengers in the fraudulent car.

The T-Bone:

Similar to the swoop and squat, this scam involves another collaborator who acts as a witness. The scammer waits at an intersection for a vehicle to drive through and then intentionally T-bones them. When authorities arrive, the witness and the scammer claim that the other driver ran a stop sign or red light.

Fraudulent Elements:

Intentional collision, false witness statements.

Tow Company Fraud:

Tow companies can also commit fraud. They may arrive at an accident scene before being called and once there, overcharge for their services to increase the insurance payout. Towing companies may also collude with repair shops and inflate towing and storage fees which results in higher costs for the victim and the insurance company.

Fraudulent Elements:

Overcharging, unauthorized arrival at the scene.

Car Repair Fraud/Counterfeit Repairs:

Repair and body shops can deceive by claiming unnecessary repairs or overcharging for necessary work and parts. They may also use non-OEM, counterfeit, or stolen parts, leading to safety issues or more expensive repairs later.

Fraudulent Elements:

Overcharging, using substandard or unauthorized parts, false claims of repairs needed.

Suspect a staged auto accident in one of your cases? Find out for certain with the assistance of our Claims Investigation team. Don’t foot the bill for someone else’s criminal actions or give in to their insurance payout demands. Our dedicated auto accident investigators are here to help unravel schemes and reduce costs. Contact us today!