The auto insurance companies, that are meant to be the savior for the members should anything go wrong, now needs to be saved themselves. Many people have found loopholes in the system that these car insurance providers follow. And this has been no small finding for them. They have used every possible means to bank on these flaws, quite literally. For many years now, these scammers have robbed the auto insurance companies by being engaged in slip and falls and claiming whiplash. As is the case, the fraudulent nature of such so called accidents and injuries are hard to prove. Some may even take years. The scammers take full benefit of that and squeeze out money from the car insurance companies which turn out to be millions every year.

Based on the pattern or format that most of these auto insurance scams follow, they can be broadly classified under two heads, namely, hard scams and soft scams. The former refers to the situation when a person invents a loss such as a collision, fire, theft etc. deliberately. Soft car insurance frauds on the other hand happens when the policy holder exaggerates a situation to reap some extra benefits from an otherwise legitimate claim. This type of auto insurance fraud is also more prevalent.

However, there are 5 most common types of scams plaguing the auto insurance industry.

a) Staging car accidents: Many of the so called accidents are not that sudden out of the blue moment at all. But are on the contrary carefully orchestrated and scripted by the scammers way ahead of time. Usually two or more cars are involved in this type of car insurance scam. The proceeds from the repair are then divided among the accomplices.

b) Posing as brokers: Even in a highly regulated market, many scammers manage to pose as authorized insurance agents. They offer heavy discounts and tempting offers on policies that are actually invalid.

c) Cashing in on crash: This kind of scam is common in roundabouts or rotaries, intersections, and highway on-ramps. This is the classic rear-end accident in which the victim ‘crashes’ into the scammers unintentionally.

d) Faking injuries: Scammers may sometime take specialists like chiropractors, physical therapists and doctors into their confidence. They would then fake head, neck and such other injuries that cannot be detected by the x-rays.

e) Creating fictional victims: Sometimes, while reporting a claim, it is a common practice among the scammers to include the names of people not present during the accident as victims. And it goes without saying that the accidents can either be real or completely fictional.

It has been the general trend among the car insurance scammers to file their claims online. And, as has been the general practice, they tend to repeat this over and over again. Thankfully there is something that can now detect this pattern. The iovation device reputation service is equipped to spot online scammers by carefully examining the devices that are being used to connect to a particular website. The device in question might be a computer, smartphone or tablets. The service identifies if it has a history of being involved in any financial fraud. Even if it is a new device, the service analyzes whether it exhibits a behavior that falls under the high-risk zone. The website then has the opportunity to disregard a transaction and hence prevent a possible business loss.

Categories: Car Insurance