Is This Auto Accident Worth an Investigation?

Soft injuries, missing vehicles and inconsistent narratives go hand in hand with auto accident investigations.

By Carla Rodriguez | Feb. 29, 2024 | 6 min. read

The FBI estimates that the total cost of insurance fraud (excluding health insurance) is more than $40 billion per year.

To put this number into a quantitative perspective, 1 billion seconds equals 31.7 years. Now that your mind is blown, let’s talk about how this affects you more granularly.

This is effectively costing the average family in the U.S. between $400 and $700 extra every year.

Staged auto accidents, and car accident scams, accounted for over $5.6 billion – that means walking 76, 278 miles around the equator worth – of FRAUDULENT auto claim payments. And it’s only getting worse. In 2002 the range was $4.3 billion to $5.8 billion.

No-Fault Insurance State Laws

No-fault auto insurance is a system that allows policyholders to recover financial losses from their own insurance company, regardless of who was at fault in an auto accident. This was created with the intent of claimants not having to wait for an insurance company to determine who was at fault for the accident.

However, in many no-fault states, shady clinics and suspicious auto repair shops exaggerate the costs associated with services, known as “padding,” to get a higher insurance payout.

Here is a list of all states with a current No-Fault law that might be getting exploited:

  1. Florida
  2. Hawaii
  3. Kansas
  4. Kentucky
  5. Massachusetts
  6. Michigan
  7. Minnesota
  8. New Jersey
  9. New York
  10. North Dakota
  11. Pennsylvania
  12. Utah

Auto Insurers lose over $20 billion a year to these kinds of scams. A March 2017 study by Verisk Analytics found that the losses break down in the following ways:

  • $10 billion for unrecognized drivers
  • $5.4 billion for underestimated mileage
  • $3.4 billion for violations/accidents
  • $2.9 billion for false garaging to lower premiums


Common Red Flags

Remember, red flags are just one piece of the puzzle when it comes to identifying fraud. If you have suspicions about a claim or case you’re dealing with, it’s crucial to follow up with a thorough investigation after obtaining the police report. Your SIU team can be an invaluable resource in uncovering additional evidence to determine the legitimacy of the accident.

Staged accident indicators have several potential categories:


  • Claimant contact information/identification
  • The incident/accident
  • Involved individuals’ statements
  • Involved vehicles
  • Vehicle damage


Contact Information / Identification:

Be wary of any person who tries to provide the information below.

  • Out-of-state phone number: This could indicate a transient trying to avoid authorities.
  • No phone number provided or claimed: Hard to believe they can have a car but not a phone.
  • PO Box or hotel address: This could be an effort to avoid contact with insurance or law enforcement.
  • False address: This may indicate an attempt to evade police or other investigators.
  • Lack of driver’s license or valid identification: Suggests the use of false or forged identification to conceal true identity.


The Incident / Accident:

  • Staged accident fraud rings often choose secluded or private areas to avoid being seen by other witnesses.
  • Soft tissue injuries, such as headaches, nausea, and pain, may not appear on medical scans, making them easier to fake and dispute
  • When there are no visible injuries, but multiple people claim the same soft physical problems, is a red flag.
  • Organized groups may have multiple passengers in the claimed vehicle to make multiple claims simultaneously.
  • Refusal of on-the-scene medical treatment, but later making a claim, can indicate the person was not injured in the accident.
  • In many staged accidents, all passengers claim the same type of injury. We’ve researched this and it is highly unlikely according to biomechanics studies.

Involved Individuals Statements:

Don’t overlook the importance of a good old-fashioned recorded statement.

Organized fraud rings often rehearse their answers and coach each other before an event.

If claimants’ stories are nearly identical and use the same wording, they may be following a shared script.

However, scripted answers typically focus only on the accident itself; when asked unrelated questions, their stories may change or become inconsistent.


Involved Vehicles

Be on the lookout for suspicious vehicles favored by fraud rings.

If all vehicles involved in an accident are taken to the same body shop or repair center, it suggests potential foul play, especially if the repair shop is over 15 miles from that person’s residence.

The vehicle may be unregistered, with a stolen or fake license plate used to make the claim.

Criminals may target commercial vehicles due to their high insurance coverage. Common targets include UPS, FedEx, and large trucking firms, with hopes of maximizing payouts.


Vehicle Damage

Fraud rings frequently try to kill two birds with one stone by using vehicles with pre-existing damage.

The scene facts may not align with the damage on the vehicle; for instance, claiming a low-speed collision when the damage suggests a higher-speed impact. The lack of debris at the scene despite significant damage could indicate the vehicles sustained the damage elsewhere. Look out for fluids, especially in front-end accidents, which should be visible on the ground.

Vehicle Theft or Fire Claims

The final fraudulent type of auto claims we will touch on is theft and fire. Fire claims are usually committed to cover up other crimes or get some start-up money after enduring hardship. Vehicle theft claims are motivated by financial gains to pay off other debts. If you want to learn more about fire and arson claims read our blog on this specific topic.


“How do you determine the legitimacy of a vehicle fire claim?

  • Pay attention to vague answers from the claimant, which may indicate potential fraud.
  • Thoroughly examine claims involving valuable contents in the vehicle, as they may be inflated.
  • Lack of odors, sounds, or smoke before a vehicle fire may require further analysis.
  • Fuel or electrical system failures are common causes of vehicle fires.
  • Failure to recall where the fire started may indicate fraud.
  • Be cautious if the claimant attributes the fire to a cigarette, as modern vehicles are typically resistant to cigarette-induced fires.

What are Common Tactics Used by Fraud Rings to Avoid Detection in Vehicle Theft Schemes?

  • Organized fraud rings use strategies to remain less visible or findable than the general public.
  • Common indicators of fraud rings trying to remain less visible, include thefts reported while the person was on vacation or out of town.
  • Some scammers may attempt to sell a vehicle first and then stage a theft or fire if unsuccessful.
  • Signs of a potential scam include for-sale signs or online sale postings for the vehicle before the claim.


Internet Mining, SIU, and Surveillance are all a crucial part of determining the legitimacy of a case. It is unacceptable for insurance companies and families to unknowingly support criminal activities. If you have suspicions regarding your case or need guidance on the best approach, please don’t hesitate to contact us.


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