Auto insurance fraud costs auto insurers approximately $30 billion each year, impacting millions of innocent motorists across the country. Auto fraud often results in severe financial penalties and legal consequences. There are many ways auto insurance fraud can take place, but they all fall into two main categories:
- Soft fraud: Soft auto insurance fraud is the most common kind of auto fraud, and it occurs when an individual exaggerates damages or injuries when filing a legitimate claim. Some people purposely add damage caused by previous accidents to their current claim in an attempt to secure a larger sum from the claim payout. It is also possible for an individual to commit soft auto insurance fraud unintentionally. For this reason, is essential for anyone involved in an accident to be completely accurate when filing an auto insurance claim.
- Hard fraud: Hard auto insurance fraud is the more serious of the two kinds of auto fraud, and it involves intentionally causing damage in order to claim it as an insurance loss. Car fires and staged collisions are two common types of hard auto fraud.
There are numerous types of auto fraud, and though some happen more frequently than others, they can all lead to serious financial and legal consequences.
Staging an accident in one of several ways is considered to be the most widespread form of auto fraud. In a staged accident scenario, the fraudster is a car driver, or sometimes a pedestrian, bicyclist, or motorcyclist, who purposely causes a car crash that would initially appear to be the fault of an innocent motorist.
The following are different types of staged accidents that lead to auto fraud:
- Swoop and squat: Two vehicles trap an innocent motorist in a rear-end collision.
- Drive down: The innocent motorist is lured into turning left early by the oncoming fraudster, who then proceeds to collide with the victim.
- Wave down: The fraudster waves to an innocent motorist that it is safe to pull out of a parking lot or side street, intentionally causing a crash between the two vehicles.
- Panic stop: A fraudster waits for the driver of the car behind them to become distracted and then slams on their brakes, causing the tailing vehicle to rear-end them.
- Sideswipe: Fraudsters positions themselves so they can sideswipe other vehicles that are using the inner left-turn lane of a dual left-turn intersection.
Exaggerated Repair Costs
This form of auto fraud is frequently committed by dishonest auto repair shops. A consumer may trust leaving their car to get fixed at a repair shop after being involved in a car accident, only to later discover that the mechanic used cheap or used parts to make the repairs. If a repair shop or body shop bills an auto insurance company for new parts, lengthens the amount of time for labor, or purposely overstates the accident damages, they are committing auto fraud.
Faulty Airbag Replacement
This type of auto fraud takes place when a mechanic does not properly replace an airbag after a car crash. The convenience of online shopping has made counterfeit airbag circulation easier for defrauders over the last few years. Some repair shops intentionally use cheaper airbag replacements as a way to increase profits, despite the practice being illegal in most states.
Another form of faulty airbag replacement is installment of a deployed airbag on a non-deployed steering wheel after a car accident. This is in effort to increase the insurance claim payout.
Faulty Windshield Replacement
This form of fraud can take innocent motorists by surprise. Fraudsters claiming to be windshield repair specialists have been known to approach unsuspecting drivers in parking lots and inform them of a damaged windshield that needs to be fixed on their vehicle. The fraudster may claim to have the right type of windshield to replace it immediately and that their services will be completely covered by the driver’s insurance company. Not only does this type of auto fraud jeopardize a driver’s auto insurance coverage when the defrauder submits phony claims under their name, the installation of faulty windshields can also put innocent motorists in serious danger.
How Can Consumers Avoid Auto Fraud?
Auto insurance fraud can impact Pennsylvania drivers in ways other than becoming direct victims of the fraudulent acts. Auto fraud is also a major contributing factor to increases in Pennsylvania’s auto insurance rates. Auto insurance companies have continued to raise their rates to offset the costs from all types of auto fraud across the United States.
Auto fraud has become known as a major league crime involving a wide variety of schemes. Whenever applying for auto insurance or filing a claim, it is essential to be honest and report events exactly as they happened. Pennsylvania motorists must always include the proper address for their vehicles on their applications, as well as any driving offenses that may be requested by insurance companies. It is against the law to knowingly withhold information or include false information.
It is also important to remember that motorists who pay their auto loans off early are entitled to a refund from the fees they paid upfront. GAP insurance covers the difference between what a vehicle is currently worth, which standard insurance will pay, and the amount owed on it after a car accident that results in damages or total loss.
Some lenders can be less than accommodating when it comes to this refund. When a lender refuses to refund a Pennsylvania motorist’s money or pay out fees already paid, they are in violation of the law. Drivers have the right to file a claim against the lender for breach of contract in these cases. As part of the claim, they can seek the coverage that the GAP insurance should have paid out, along with any additional damages sustained in the car accident.
Depending on the circumstances, innocent parties can also seek additional economic expenses incurred during this type of conflict, including attorney fees and court costs. A claimant may additionally have non-financial demands.
A skilled lawyer can help in a range of consumer fraud matters. A lawyer can help you reach the best possible outcome in your case.
Pittsburgh Consumer Fraud Defense Attorneys at East End Trial Group Advocate for Victims of Auto Fraud
If you feel you are a victim of auto insurance fraud or believe you have evidence of a fraudulent claim, one of the experienced Pittsburgh consumer fraud defense attorneys at East End Trial Group can help. Our legal team handles various consumer fraud cases. Call us at 412-223-5740 or contact us online for a free consultation. Located in Pittsburgh, we serve clients throughout Pennsylvania.