The Maryland Insurance Administration (MIA) said “crash and buy” auto insurance schemes are a growing trend in the state.
When an uninsured driver crashes, buys insurance, then claims the accident happened after the policy took effect, that is fraud and a felony that could result in fines or jail time, the MIA said in its March 23 announcement. Such “crash and buy” schemes constitute a quarter of the fraud investigations conducted by the MIA.
The MIA cited a recent case of a Forestville, Maryland, woman who totaled her car after hitting a Metro transit bus. She then purchased insurance before reporting the accident in a bid to get the insurer to pay. In February, the driver was ordered to reimburse the insurer more than $15,000 and to pay a $4,500 penalty.
The MIA said it has taken action on 36 such civil fraud cases since the state agency recently gained authority to pursue civil cases. To date, the MIA has assessed $141,500 in penalties and ordered $56,845 in restitution for these cases.
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