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Common Signs of Auto Insurance Fraud

Some people consider insurance fraud to be a victimless crime; however, that is not the case. Insurance fraud affects all policyholders and is estimated to raise insurance premiums by as much as $300 annually. This is why Maryland Auto Insurance has created a Special Investigations Unit specifically to detect and deter insurance fraud. Here are some common signs of auto-insurance fraud:

Faking an accident or exaggerating injuries

A good example of this is when a driver quickly pulls in front of another car and then slams on their brakes, intentionally causing a collision. Sometimes, a person doing this will intentionally wait until they notice the driver behind them is distracted. This causes the car to rear-end them so that they can collect money for vehicle damages. Additionally, the driver may try to exaggerate their injuries after the accident. Often these injuries are unable to be seen by an X-ray, such as chronic pain.

To avoid falling victim to a fraudulent car accident, the National Insurance Crime Bureau recommends the following:

  • Avoid tailgating another driver.
  • Call the police immediately following an accident.
  • Document the number of passengers in each involved car.
  • Take several pictures to document damages.
  • Avoid doctors insisting you file a personal injury claim even if you are not hurt.
  • Steer clear of tow trucks that appear when you have not called for one

Including existing damage when reporting a claim

Prior damages are never covered when you get a new car insurance policy. This means that some people will be tempted to report existing damage when reporting a claim after a car accident. However, it is important to be honest and accurately state the damages that occurred within that incident only. This fraudulent behavior is why most insurance carriers usually associate a damaged car with a higher risk or are likely to deny coverage.

Providing false information to your Insurance company

From understating the number of miles you drive in a year to using a fake address to get a lower premium, providing false information to your insurance company is considered insurance fraud.  Remember that these falsities can always be double-checked by your insurance company at any time. If they suspect a fraudulent mileage has been given, you may be asked to provide proof, or how many miles have been recorded each time you’ve taken your vehicle in for service. If you are traveling thousands of miles over what you’ve reported to your insurance company, you will likely be caught and penalized for it.

How You Can Help

As a policyholder, you are directly affected by insurance fraud. That’s why we encourage you to report if you suspect someone you know is committing insurance fraud. If this is the case, please contact local law enforcement, Maryland Auto Insurance or the National Insurance Crime Bureau. These hotline calls are free and anonymous, so you don’t have to worry when it comes to doing the right thing.

  • NICB Hotline: 1-800-TEL-NICB
  • Maryland Auto Insurance  Hotline: 1-800-500-0333